College of Social Science and Humanities

Department of Civics and Ethical Studies

Regional Cooperation and Integration Module for Distance and Continuous

Education Learners

Course Code: (CESt 3064)

Prepared By:- Jemal Seid (MA in Foreign Policy and Diplomacy)

Tilahun Tadesse (MA in International Relations)

Edited By:- Eshetu Getahun (MA in Regional and Local Development Studies

July, 2018
Table of Contents
Introduction…………………………………………………………………………………………………………………………….………1
Chapter One…………………………………………………………………………………………………………………………….….3
Understanding the Concept, Nature and Development of Regionalism and
Integration………………………………………………………………………………………………………………………………………3
Section One: Conceptual and Terminological Clarifications……………………………………………………………..4
Lesson One: Understanding Region, Regionalism, Regionalization, and Regional Cooperation,
Coordination and Integration…………………………………………………………………………………………………………..4
1.1. Defining a Region………………………………………………………………………………………………………………………4
1.2. Regionalism vs. Regionalization………………………………………………………………………………………………..8
1.3. Regional
Cooperation……………………………………………………………………………………………………………..Error! Bookmark
not defined.
1.4. Regional Coordination/
Harmonization…………………………………………………………………………………..Error! Bookmark not defined.
1.5. Regional
Integration……………………………………………………………………………………………………………….Error! Bookmark
not defined.
1.5.1 Regional Cooperation vs. Regional Integration: Similarities and
Differences.........................................................................................................................................Erro
r! Bookmark not defined.
Section Two: Associated Concepts of Regional Cooperation and
Integration…………………………………Error! Bookmark not defined.
Lesson Two: Possible Phases of Regional
Integration…………………………………………………………………….Error! Bookmark not defined.
Lesson Three: Waves, History and Reasons of Regional Cooperation and
Integration…………………………………………………………………………………………………………………………………….Err
or! Bookmark not defined.
1.6. Waves and History of Regional Cooperation and Integration………………………………………………….20
1.7. Why Regional Cooperation and
Integration?..............................................................................Error! Bookmark not defined.
1.7.1. Traditional
Gains………………………………………………………………………………………………………………Error! Bookmark not
defined.
1.7.2. Non-Traditional
Gains………………………………………………………………………………………………………Error! Bookmark not
defined.
Lesson Four: Factors, Preconditions, and Sovereignty Issues of Regional Cooperation and
Integration…………………………………………………………………………………………………………………………………….Err
or! Bookmark not defined.
1.10. Factors and preconditions of Regional Cooperation and
Integration……….…………………………..Error! Bookmark not defined.

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1.11. Regional Integration and State Sovereignty
Dilemmas………………………………............................Error! Bookmark not defined.
Summary……………………………………………………………………………………………………………............................33
Chapter One Self-Test Exercises …………………………………………………………………………………………………..34
Chapter
Two…………………………………………………………………………………………………..........................Error!
Bookmark not defined.
Major Theories and Issues of Regionalism and
Integration……………………………………………………………Error! Bookmark not defined.
Section One: Theories and Approaches to Regional Cooperation and
Integration…………………………Error! Bookmark not defined.
Lesson One: Economics-Based
Approaches………………………………………………...............................Error! Bookmark not defined.
Lesson Two: Political Science Based
Approaches……………………………………………………………………………Error! Bookmark not defined.
Section Two: Identity and Regionalism: Controversies and
Complementarities…………………………….Error! Bookmark not defined.
Lesson Three: The Essences of Identity in Regional Cooperation and Integration………………………….67
Summary……………………………………………………………………………………………………….………………………………Err
or! Bookmark not defined.
Chapter Two Self-Test
Exercises…………………………………………………………………………………………………….Error! Bookmark not
defined.
Chapter
Three……………………………………………………………………………………………………………………………Error!
Bookmark not defined.
Cases of Regional and Sub- Regional Cooperation and Integration from other
Continents……………………………………………………………………………………………………………………………………..Err
or! Bookmark not defined.
Lesson one:……………………………………………………………………………………………………………………………………78
3.2. Regional and Sub-regional Organizations…………………………………………………….……………….…………78
3.2.1. The European Union/ EU………………………………………………………………….………………………….79
Lesson
two:………………………………………………………………………………………………………………………………….Error!
Bookmark not defined.
3.3. North American Free Trade Agreement
(NAFTA)……………………………………..…………………………..Error! Bookmark not defined.
Lesson
three:……………………………………………………………………………………………………………………………….Error!
Bookmark not defined.

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3.4. The Association of South-East Asian Nations/
ASEAN…………………………………………………………...Error! Bookmark not defined.
Lesson
four:…………………………………………………………………………………………………………………………………Error!
Bookmark not defined.
3.5. The Middle East and the Arab
League…………………………………………………………………………………..Error! Bookmark not defined.
Summary……………………………………………………………………………………………………………………………………..Error
! Bookmark not defined.
Chapter three self-check
Questions…………………………………………………………………………………………....Error! Bookmark not defined.
Chapter
Four……………………………………………………………………………………………………………………………Error!
Bookmark not defined.
Regionalism and Integration in
Africa………………………………………………………………………………………….Error! Bookmark not defined.
Introduction: Overview of African Regional
Integration………………………………………………………….……Error! Bookmark not defined.
4.1. Historical Background on East African Regional
Integration………………………………………………….Error! Bookmark not defined.2
4.1.2. The African Union
(AU)…………………………………………………………………………………………………..Error! Bookmark not
defined.
4.3. Sub-Regional
Organizations……………………………………………………………………………………………….…Error! Bookmark not
defined.
4.3.1. Common Market for Eastern and Southern Africa
(COMESA)……………............................Error! Bookmark not defined.
4.3.2. Southern African Development Community
(SADC)……………………………………………………..Error! Bookmark not defined.
4.3.3. Economic Community of West African States
(ECOWAS)……………………………………………..Error! Bookmark not defined.
4.5. Challenges of Regionalism and Integration in
Africa……………………………………………………………..Error! Bookmark not defined.
4.6. Ethiopia and Eastern Africa
Integration…………………………………………………………………………………Error! Bookmark not defined.
4.6.1 Intergovernmental Authority for Development
(IGAD)……………………………………………………Error! Bookmark not defined.
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Summary………………………………………………………………………………………………………..……………………………Error
! Bookmark not defined.
Self-Test
Questions………………………………………………………………………………………………………………………Error!
Bookmark not defined.
Bibliography…………………………………………………………………………………………………………………………………Erro
r! Bookmark not defined.

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 Introduction
This module is designed as a general reference to the course of regional cooperation and
integration. It is particularly aimed at helping learners acquire the necessary learning
outcomes since it incorporated some of the main definitions of what really constitutes a
region, and identifies the basic concepts and approaches to regional cooperation and
integration. The module portrays the multidimensionality, dynamism, diversity and the
hierarchical nature of regional integration conceptually, theoretically, and practically with
different global references. This, again, calls attention to the motivations that lead groups of
states and regions to establish supranational entities to serve national interests and further
convergences.

The module guides the reader through a description of regional cooperation and integration
across the political, economic and security arenas. It encompassed taxonomies of regions as
micro-regions (sub-national) and macro- regions (supranational), etc. Again, it highlights the
existence of dilemmas between regional operations and national sovereignty ―Red Lines‖.
Further, in encompassed the essence of globalization, identity, and changes in regional
cooperation and integration in the world. This module also added some chronological waves
of regional cooperation and integration that have taken place in Asia, Latin America, Africa
and Europe.

As this module aimed at equipping the learners with the basic tools necessary to understand
the variety and scope of cooperation and integration across countries and within countries,
while appreciating the dynamic and complex nature of such arrangements, the above points
further invite interested readers to get deep into the bibliography of selected lists at the end of
the module. To enhance and test the learner‘s understanding, this module provided self-test
questions and activities inside. To refer major and additional regional cooperation and
integration concepts, you are not limited to those mentioned issues and bibliographic
guidelines.

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Module Objectives
After a successful completion of this module, you should be able to:
Define what regional cooperation and integration is very critically with regard to factors
and mutual advantages among the peoples of different states.
Define associated terminologies and concepts to regional cooperation and integration.
Analyze why and how regional cooperation and integration directly bear and get into
dilemmas with national sovereignty.
Develop basic analytical knowledge about the theories, steps, and procedures in the
creation of regional cooperation and integrations.
Distinguish the essences, approaches, typologies, convergences and divergences of
globalization and regional integration.
Attempt to analyze concepts and scientific findings systematically and critically with
contextual understandings in our country, (sub) continent and the globe at large.
Explain the roles, controversies, types and classifications of identities in region building.
Identify the new dynamics of regional cooperation and integration with possible
references in Africa, Europe, Asia, and the Americas.
Distinguish the point of convergences and divergences between globalization and
regional integration with regard to the successes and failures of regional cooperation and
integration in Africa.
Elaborate the Ethiopian and (Eastern) African Cooperation and Integration such as
Ethiopia and IGAD, Ethiopia and COMESA, Ethiopia and etc.

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 Chapter One
Understanding the Concept, Nature and Development of
Regionalism and Integration
Hello dear learner! Welcome to the first chapter of the course regional cooperation and
integration. The idea of regional cooperation and integration has always been viewed as a
fashion of today‘s interconnected world to resist and bridge economic balkanization and
international/political passivity in the global political, economic and social dynamics. Hence,
the major rationale for the incorporation of this course is to arm students with theoretical and
practical knowledge of regional cooperation and integration from global, continental, sub-
continental, and national levels of proceedings, achievements and challenges.

This chapter covers terminological and conceptual clarifications, taxonomies, sequential

stages, comparisons, factors, reasons, and sovereignty issues behind regional cooperation and
integration. More specifically, terms such as region, regionalism, regionalization, and
regional cooperation, coordination/harmonization and integration are well elaborated and
discussed per the above mentioned criteria of understandings. As it is the aim of this module
to familiarize the student with the concepts or definitions and practices of regional
cooperation and integration, we hope that he/she will get to understand the major causes,
courses and effects of regional cooperation and integration at different layers of contexts.
Course Objectives
At the end of this chapter, students will get the opportunity to:
Grasp the major terminological and conceptual underpinnings of region, regionalism,
regionalization, regional cooperation, coordination, and integration.
Analyze the overall subject matter of regional cooperation and integration.
Critically identify the waves and history of regional cooperation and integration.
Critically see the possible stages of regional cooperation and integration from political,
economic and regional stands.
Comprehend the ―why‖ of regional cooperation and integration with determining factors.
Define the major controversies and dilemmas of regional cooperation and integration vs.
national sovereignty.
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Section One: Conceptual and Terminological Clarifications
Lesson One: Understanding Region, Regionalism, Regionalization, and
Regional Cooperation, Coordination and Integration
Lesson Objectives:
 This lesson requires 3 hours in different sessions for a successful accomplishment.
After accomplishing this lesson, you will be able to:
Explain the term and types/taxonomies of regions.
Define the terms: regionalism vs. regionalization.
Explain regional coordination/harmonization.
Illustrate the meaning of regional Cooperation.
Explain the meaning of regional integration.
Compare and contrast regional cooperation and integration.

Dear learner, in this lesson, the major emphasis is given to the basic terminological and
conceptual understandings of region, regionalism, regionalization, regional cooperation,
coordination and integration with basic distinctions and commonalities. Moreover, the learner
will be able to associate those conceptual and terminological issues with practical examples
with different regional cooperation and integration contexts.
A

1.1. Defining a Region

Activity
Dear student, can you put the operational or working definitions, features and
classifications of a region on the space provided below?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Region is defined differently by different people. Regions are frequently defined as groups of
___________________________________________________________.
countries located in the same geographic space; but where one region ends and the where

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next begins is sometimes unclear. Furthermore, most researchers agree that a region implies
more than just physical proximity. A region based on geographic proximity, is a social and
cultural homogeneity, shared political attitudes and political institutions, and economic
interdependence across multiple dimensions—including economic transactions,
communications, and political values—as determining whether a group of countries
composes a region. Regions include states that are geographically proximate, interact
extensively, and have shared perceptions of various phenomena. Although geography lies at
the heart of most of these definitions, some scholars define regions in nongeographic terms.
Behavioral definitions emphasize that political practice and interaction can alter a region‘s
composition. Regions are politically made in different domestic political coalitions. Other
nongeographic definitions stress on ideational or social-constructivist stress shared communal
identities of states within a region.

Regions can be defined variously by: geography, economic interaction, institutional or

governmental jurisdiction, or by social or cultural characteristics. The region is not a clearly
defined entity. It is subject to various interpretations, However, it can be defined Region is
geo-political territorial area consisting of a particular list of states as basic units in the
identification of the group of states as being consisted in one region, sub region, continent,
subcontinent, etc. As such region does not refer to global or world arrangements like the
United Nations and others.

Furthermore, the concept of regions is part of the perpetual transformation of the

international system, in which regions emerge, subsist and eventually cease to exist. Or, what
we might label the process of regional integration and disintegration. This also means that
regions are not unitary or homogeneous units since they overlap and come in plural forms.
Although regions are not naturally constituted geographical units, they cannot exist without
having a physical reality. Thus, territoriality is a sine quo non of regions. The territorial
shaping of a region implies that regions require some kind of boundaries. After all, a territory
can be defined as a cohesive section of the earth's surface that is distinguished from its
surroundings by a boundary. Boundaries have a dual role in the creation of a 'sense of place',
namely the establishment of who is 'inside' and who is 'outside'. Regional borders are the
products of a continuous process of construction and deconstruction, which implies that
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regional borders are mutable.

The word region stems from Latin word regio, which denotes "direction, point of the
compass", but later develops by association with regard to direct rule. Region was defined as
the territory controlled by a regent and regiment, so it should not come as a big surprise that a
region had indeterminate boundaries. While this points at a potential essence of 'region', it is
impossible to assert any original meaning to the concept as its particular connotations have
varied greatly over history and across different cultural contexts. Regional designations are
no more "real" in terms of geography than they are "natural" in terms of culture". For
instance, if we talk about the "West", it encompasses now Western Europe, the US, Canada,
Australia, and Japan. The "Islamic world" is by no means limited to the Middle East, but
stretches from Indonesia to Nigeria and Northern Africa. Thus, as products of culture and
economics, history and politics, geographically defined regions change over time.

1.1.1. Taxonomy of Regions

The various classifications of regions are given in the "typology of regions". The fact that
there is a multitude of possibilities to approach the problem of "region" suggests that the
best way to define it is in an eclectic and plastic way. If it is crystal clear that regions
necessitate a geographical dimension, the question is then, how to recognize a particular area
as a region. The point is that regions define themselves; they are only identifiable post
factum. There is no use in looking for one universal criterion that defines a region, nor to
come up with a "catch-all" cocktail of criteria. It is the process of regionalism that eventually
defines the region, or in other words regions become 'visible' by patterns of interaction, such
as discursive practices occurring within geographical, historical, cultural, political and
economic variables.

One can define regions as territorially based subsystems of the international system. They
'exist' as they occur in discourses. This definition implies that there are many varieties of
regional subsystems with different coherences. Regions can be found at all territorial levels.
There are regions within nation-states, cross-border regions on a sub-national level, as well as
regions above the nation-state. Regions can be classified according to many criteria. In this
module, we use the following - widely spread - typologies:
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Macro-regions: sometimes called international regions or world-regions, refer to large
territorial units comprising different states. A former definition of macro-region is: 'A limited
number of states linked together by a geographical relationship and by a degree of mutual
interdependence'. This is a valuable definition, but seen from the increasingly interdependent
world, a more accurate definition is the one provided by Barry Buzan: "A spatially coherent
territory composed of two or more states". Typical examples are the 'Pacific region' or the
'Mediterranean region'. These entities are often characterized by their formal level of
integration (e.g. the European Union in Europe, Mercosur in Latin-America; African Union
in Africa, etc.). From a geographical perspective, one can distinguish the following regional
'realms' in the world: Europe, Russia, North America, Middle America, South America,
North Africa/Southwest Asia, Sub-Saharan Africa, South Asia, East Asia, Southeast Asia,
South Asia, East Asia, and Southeast Asia.

Micro-region: can be defined as a territorial area that is smaller than a state to which it
belongs, but larger than a municipality. Typical examples of such micro-regions are
provinces, districts, departments or even mega-cities. A special case of a micro-region is one
that spreads across different states (cross-border region). Micro-regionalism is related to
macro-regionalism in the way that the larger regionalization (and globalization) processes
create possibilities for smaller economically dynamic sub-national or transnational regions to
get a direct access to the larger regional economic system, often bypassing the nation-state
and the national capital, sometimes even as an alternative or in opposition to the challenged
state and formal state-led regionalisms. An example of where the typologies of micro-regions
are commonly used is the Assembly of European Regions (AER). To bring this case to our
country‘s context, micro-region can be associated with cooperation between different
regional states of Ethiopia. This may be the cooperation between Oromia, Amhara and
Benishangul Gumuz region around their common border.

Sub-Regions: Within the realms of Macro-regions one can also identify smaller regional
entities, sometimes called 'sub-regions'. In Europe for instance, one can refer to sub-regions
that reflect old historical formations such as the Swedish, Baltic Empire, the Habsburg
Empire ... But not only nations, also Macro-regions can form a sub-region. The old Hanseatic

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project in Europe seems to be revitalized today as Hamburg/Bremen develops more links
with Baltic states in response to the Southern German growth pole centered on Munich that in
turn forms a 'growth-triangle' with Milan and Barcelona. However, setting the boundaries of
some of these realms is a daunting task, because they are susceptible to different
interpretations. This is especially the case with Europe. Talking of 'Europe' can mean
different things to different people. There is today much more to identifying 'Europe' than
looking on a map: politics is more important than geography. How people choose to define
Europe will have a significant impact on how they think both about security (in a broad
sense) in Europe and Europe's relations with the outside world. The chosen definition will
provide the basis of the answer to the crucial question: ―Who is 'us' and who is 'them'
politically speaking?‖

For instance, for many people, Europe means simply the Macro-regions, thus, they are
referring to the area covered by the EU member-states, or what in geography is called
Western Europe. However, the impending wave of accessions will inevitably lead to a
broader interpretation frame of Europe. Sometimes, Europe is used to describe the area
stretching from the Atlantic to the Urals, which refers to the "whole" of Europe and, thus,
includes two former Soviet Union Republics and a part of the Russian Federation. Another
interpretation of Europe is the one, which refers to the area stretching from Poland to
Portugal.

Cross-border regions: is actually a special case of a micro-region, whereby the micro-region

spreads across different states. It is formed when certain districts in one state want to
cooperate with the other district in another state. It is a cooperation of micro-region on
several issues around their common border. There are several cross-border regions existing in
our today‘s world. One example such cross-border region is a "Cascadia" dynamic cross-
border region in North America which is found at the western edge of the US-Canadian
border. Cascadia, in fact, is presented as a rather flexible notion. Depending on the interests
and agendas involved, different 'boundaries' of Cascadia are constructed.

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1.2. Regionalism vs. Regionalization

Activity
Dear learner, can you define, compare and contrast the terms: regionalism vs.
regionalization?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
In light of the ontological disagreement over what really constitutes a region, it is no surprise
_____________________________________________________________________
that _____________________________________________________________________
regionalism is also a contested concept. One source of confusion has been the distinction
_____.regionalism and regionalization. Various political scientists have argued that
between
regionalism is a political process marked by cooperation and policy coordination, whereas
regionalization is an economic process in which trade and investment within the region grow
more rapidly than the region‘s trade and investment with the rest of the world.
Regionalization is a bottom-up, societally driven process, whereas regionalism ―involves
primarily the process of institution creation‖ and is the intentional product of interstate
cooperation.

Regionalism is institutionalized practices and regionalization is a process that engages actors.

However, regionalization is a feature of regionalism. Regionalization is ―the growth of
societal integration within a region and the often undirected processes of social and economic
interaction.‖ This is akin to informal integration or ―soft regionalism,‖ which involves
increasing population flows, multiple channels, and complex social networks spreading ideas
and attitudes. Regionalism is a policy or a project, while defining regionalization as both a
project and a process, preceding and flowing from regionalism. Alternatively, regionalism is
the globalizing, restructuring context of regionalization. Regionalization reflects state and
non-state forces reacting in opposition to globalization, whereas regionalism concerns ideas,
identities, and ideologies related to a regional project. Regionalism involves institutions
established by governments to promote regional economic integration but emphasizes the
varying degrees of commitment by members.

A wide variety of researchers consider regionalization to be a process driven by economic or

social forces and regionalism to be a political process. Yet a multiplicity of meanings for
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each of these two terms remains. The boundaries between regionalism and regionalization
remain porous/ blurred. On the one hand, regionalization driven by private actors—economic
and may otherwise—is often reinforced by states. On the other hand, bottom-up efforts
(domestic and transnational) may lead to regionalism as the intended or unintended product
of pressures on states. Identifying different sequences of regionalism and regionalization—
and their mutual effects—may be a more productive endeavor but it can only be advanced
through improvements in the conceptualization and measurement of ―region,‖ ―regionalism,‖
and ―regionalization.‖

1.3. Regional Cooperation

Activity
Dear learner, can you define what really regional cooperation is in your own words
on the spaces provided below?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_______.

It may be the weakest and issue-focused arrangement. Countries may cooperate for a joint
development project. They may also do so for facilitating exchange of information and best
practices. They may also cooperate on monetary and exchange rate policy issues. They retain
full control and if needed, may opt-out of the arrangement with relative ease. Except for
narrow issues calling for joint development, cooperation signals the lowest level of
multilateral commitment. It may be most effective for addressing many common causes that
require regular exchange and consultation, but no supranational body to make decision. ―Sub-
regional common goods‖ would typically be the subject of some form of joint development
and management scheme (ex: River Basin Initiatives) or specific sub-regional initiatives (ex:
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HIV, Malaria, Conflict Prevention and Resolution). This is also the case for issues related to
governance, knowledge and best practice sharing, etc.

1.4. Regional Coordination/ Harmonization

Activity
Dear learner, can you define and differentiate regional coordination/harmonization
from other terminologies on the space provided below?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
It is___________________________________________________________________.
the higher level of economic cooperation. It usually involves the voluntary alignment of
national policies and investments in certain sectors of the economy. They imply a higher and
more formalized degree of cooperation and commitment, hence a more effective lock-in
arrangement as compared to simple cooperation. Typically, harmonization is intended to
address inconsistency in policy content, whereas coordination is used to solve time-
consistency issues. Harmonization may best apply to tax policy, trade policy, etc. As it is a
higher level of cooperation, it usually involves harmonization of national legislation or the
adoption of common legislation. On this level, all legislation is still national, and all policies
and instruments are nationally controlled and implemented, although they might be
regionally agreed.

1.5. Regional Integration

Activity
Dear learner, can you define what really regional integration is with its peculiarities
and commonalities from other technical and related terminologies?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
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_____________________________________________________________________
_____________________________________________________________________
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.
The word ―integration‖ originates from the Latin word, ―integer‖ to mean a ―whole‖. Thus,
integration implies the development of some new alliance or new integrity of separate parts,
which start to act as an independent unity. It is the highest level of regional cooperation. In a
regionally integrated market, some of the traditional decision-making powers of nation states
have been handed over to the regional level, and regional rules and decisions supersede
national legislation. Furthermore, at least some economic policies are formulated on the
regional level. Integration can thus refer both to the process as a whole, but also to a certain
advanced level of cooperation. Integration implies a higher degree of lock-in and loss of
sovereignty, and also tends to apply to a broader scope, although it could as well be limited to
a specific market. It may imply more united markets for goods (FTA and custom unions),
factors (common markets), and also a common currency such as in the European Union. A
deepest form is a federated union such as the United-States, Switzerland, and Tanzania which
include political as well as economic integration, including in infrastructure-related services
(telecom, air-transport).

Typically, high degree of economic interactions – trade, investment, etc. - could make
integration more cost effective as opposed to simple harmonization/coordination, as the
opportunity cost of exit rises. Ernst Haas (1986), in Heinonen (2006), defined integration as:
…..the process whereby political actors in several distinct national settings are
persuaded to shift their loyalties, expectations and political activities toward a new
center, whose institutions possess or demand jurisdiction over preexisting national states.
The end result of a process of political integration is a new political community,
superimposed over the pre-existing ones.
Also, the scope of integration and the concomitant complexity call for countries to relinquish
sovereignty to a supra-national agency, the purest form being a federal government. There
are different levels of integration, different classification possibilities and even different
definitions of "integration". Asking a scholar to define integration is like asking a blind man
to define an elephant. Surprisingly enough, there is no clear definition of the word
"integration", despite the common use of the word: a town's modern architecture is quite well
integrated with the old, you integrate yourself into the modern society, a good musical
depends on the successful integration of acting with song and dance - or what about an
integrated circuit?

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As long as we bear in mind that definitions are merely analytical tools without any truth-
value, there is no problem. In fact, it all boils down to interpretation and investigation. In
their quest to explain what integration is, researchers start from different assumptions,
emphasize on different aspects, delineate different criteria and identify different actors. This
search necessarily brings about a range of various explanations, none of which are able to tell
the complete story but together they form an 'integrated' picture of what integration is all
about. One might compare it to completing a large jigsaw/puzzle: every piece gives some
information but you need all the pieces to see the entire picture. Integration is, in all of its
manners, levels, stages, goals and procedures.

In loose sense, integration is the highest stage of cooperation. It involves states as basic
targets with wide and growing public participation to the extent of giving decisions directly.
It demands sacrifice of some extents, areas of powers out of the ultimate decision making
privileges of the state. Different authors tried to define regional integration multi-
dimensionally. Even though that is the case, regional integration can be understood along
three major dimensions of the issue. It has a geographic scope illustrating the number of
countries involved in an arrangement (variable geometry). It also has Substantive coverage
or width showing the sector or activity coverage (trade, labor mobility, macro-policies, sector
policies, etc.). And finally, it shows depth of integration to measure the degree of
sovereignty a country is ready to surrender, that is from simple cooperation or coordination to
deep integration. Integration can also be understood as an outcome, as a process, and the
combination of both. The below are other ways of understanding regional integration.

Integration as an Outcome: Defining integration as an outcome means that one describes

integration as something static, whereby a situation of integration is achieved only when
certain predefined criteria are fulfilled. Integration is thus seen as a property of a system,
which characterizes the structure or a particular conjuncture. Scholars define the criteria of
what they believe constitutes integration, and then examine whether case studies match their
standards. For instance, if we consider the formation of the EU as a process of
institutionalization, we could examine how "integrated" the EU is at a certain point in time,
thus study the degree and type of integration as a characteristic of the EU.

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Integration as a Process: Integration as a dynamic process refers to the development of a
state of isolation to a condition of integration. Research in this case is concerned with the
variables, which are likely to induce or inhibit integration. If we resume our example of the
EU as a process of institutionalization, we might then study the process through which the
EU has been integrated.

Integration as a combination of outcome and process: A combination of both

integration as an outcome and integration as a process defines integration as any level of
association ascertained by specified measures or as any level of association between actors,
on one dimension or another. This way of defining integration allows the researcher to speak
of various types of integration (economic, social, political, etc.), and of various levels of
integration. This enables researcher to do comparative research. In addition, regional
integration has specifically defined features:
Strategic goal: having political union or oneness as the ultimate goal sought in
integration.
Incremental direction: that refers to the continual progress in the stages and levels of the
cooperation; past stages do not repeat themselves.
Possessing spatial and sectional expansion: in the essence of the cooperation with the
potential openness and agreed opportunity for newly coming members.
Permanence: is the other feature to the enduring nature or the irreversibility of the
process of making synchronizations of policies and actions.
Formality or Officiality: is inside to the fact that negotiations, agreements, compromises,
treaties and exchanges in the process of integration are done as part of the interstate
known procedures without involving covert, behind the screen and secret agreements and
implementations.
Pragmatism: as a dominant philosophy which calls on the effectiveness of former
integration steps.

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1.5.1. Regional Cooperation vs. Regional Integration: Similarities and
Differences

Activity
Dear learner, this course is fundamentally composed of the two basic terminological
issues: regional cooperation vs. regional integration. So, can you find their
similarities and differences while defining them?
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________________________________________________________.

A. Similarities
Actor fundamentality: in both cases, national non-governmental civic and political
organizations, individuals, etc. may have contributions or influences but ultimately the
highest decision making actor is the state.
Party interests: are always there as a rule in both cases where they may be advantageous
or disadvantageous depending on the nature of the arrangement.
Negotiation based: both schemes are undertaken completely, voluntarily and in free
choice even though the influence of some big hegemonic powers is unavoidable in
speeding up agreements and implementations.
Management of conflicts: both are based on a continuous process of addressing
conflicting interests and relations without that they could never come true.
Distributional: is a common and an inherent attribute and duty in both cases where
resources, powers, duties and rights are horizontally distributed among the member states;
Normative goals: are set with different extents in both cases with minimum baselines of
normative goals like peace, mutual advantages, and cordialities or preventing and
influencing a third party hostile to those under the arrangement.

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 B. Differences
Bottom up/ top down: integration as a major and a fundamental decision affecting the
sovereignty of the state and the advantages of citizens tends to be based on popular
participation from bottom up while cooperation is usually top down.
Permanent/ situational: Integration is permanent arrangement never desired to regress
once signed and implemented, cooperation could be ad hoc, renewable contract, even a
project to phase out sometime after ending its importance.
Incremental/ static: while integration is continuously to grow up to include pieces and
parts to engulf wholes, cooperation tends to freeze at some level of arrangement required
by the causes underlying it.
Diffusion/coordination: integration is based on the renunciation of former rules,
procedures, and institutions usually to be dissolved and replaced by new and more
integrated ones; cooperation is suspended at coordination of certain policies without
diffusing into oneness.
Strategic/tactical: integration tends to be a long-time interest covering fundamental
interests; cooperation is a tactical arrangement to last when some problems sought to be
well solved.

To summarize, the concept of regional integration can be distinguished from associated

concepts along three main lines: it is voluntary: since other unions may or may not be
voluntary. It is collectively undertaken: since it brings into play the concept of community-
building (in contrast to the contractual and temporary nature of regional cooperation). And it
is geographically defined since geographic contingency is a sin quo non (in contrast to the
notion of economic integration in the generic sense of the term) to integration.

Section Two: Associated Concepts of Regional Cooperation and

Integration
Dear learner, in addition to the terminologically and conceptually defining variables, regional
cooperation and integration includes some kinds of phases, waves, history, factors, reasons
and sovereignty issues. So, those elements are defined below across different lessons.

Lesson Two: Possible Phases of Regional Integration

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 This lesson requires 3 hours in different sessions for successful accomplishment.
Lesson Objectives
After successful completion of this lesson, you will be able to:
Identify the different phases that regional cooperation and integration passes.
Explain the unique features of those developments across each phase.
Connect those phases with local/regional realities and contexts.
Identify similarities and differences between economic and political aspects of those
phases.

Activity
Dear learner, as we have seen so far, regional integration is a process based
phenomenon that follows some form of incremental developments. So, can you
define it from very regionness, economic, and political integration schemes?
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As societies are composed of different sectors, we can distinguish different forms of
integration, namely: economic, political, security, environment, social, cultural, development
integration, etc. However, the diverse processes tend to converge as the integration process
intensifies. Here, the stages of integration differ across those types of integration. Hettne, and
Söderbaum, (2000), identifies five phases of the process the whole regionness increases.

Region as a geographical unit: At the earliest stage, a region can be identified primarily as a
geographical area, for example, ‗Europe from the Atlantic to the Urals‘.

Regional complex: Increased social contacts and transactions between previously isolated
human groups facilitate some kind of increase in the level of regionness. Regional complex,
thus, refers to a level where translocal relations are created and gradually tightened.

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According to Hettne, state-formation usually occurs at this phase. The territorial states
monopolize all external relations and are usually relatively inward-oriented, which stagnates
the process of regionalization for a certain period of time.

Regional society: This is the level where the formal regionalisation process develops and
intensifies. The number of interregional contacts increases considerably both through state
and non-state actors. The author emphasizes in this phase that, nation-states are not becoming
obsolete or disappearing, but rather that they are undergoing major restructuring in the
context of regionalization and they will most likely end up as semi-independent parts of
larger regional political societies.

Regional community: On this level, the region increasingly turns into an active subject with
a distinct identity, institutionalized actor capability and legitimacy. Regional civil society has
also developed at this point.

Region-state: This level is mainly hypothetical and unlikely to be ever achieved. Here, the
process of homogenization has gone so far that both formal and informal integration
processes have been completed. An analogy could be found from completed state-formation
and nation-building processes on a national level.

According to Biswaro (2011), in the mindset of most neo-classical economists there has
conventionally existed only 'one theory', namely what here is labeled the orthodox theory of
regional economic integration (sometimes referred to as trade integration or market
integration). The customs union concept constitutes the foundation of this theory. It involves
the creation, in linear succession, of increasingly more advanced stages of economic integration:
preferential trade area, free trade area, customs union, common market, economic union and
political union. Accordingly, he identified the following sequential stages of regional
integration from economic integration to full integration.

At the lowest stage, there is a Preferential Trade Area (PTA) whereby member countries
charge each other lower tariffs than those applicable to non-members, while preventing
the free movement of goods within the area.
The second stage is a Free Trade Area (FTA) in which tariffs and quotas are eliminated
among members, but each country retains its own tariffs against imports from non-

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 members.
A Customs Union (CU) goes further: in addition to sharing a free trade area, members
erect a common external tariff.
The Common Market (CM) is a more developed stage of integration. It combines the
features of the customs union with the elimination of obstacles for the free movement of
labor, capital, services and persons (and entrepreneurship).
The next step on the ladder is an Economic Union (EU), which involves a common
currency and/or the harmonization and unification of monetary, fiscal and social policies.
The last stage is a Federation. It presupposes the unification of economic and political
policies, and that the central supra-national authority not only controls economic policy but is
also responsible to a common parliament.

According to Nikola Lj. Ilievski (2015), the process of political integration, with a specific
focus on the decision-making method, tends to transform the decision-making process‘s
principle, from unanimity to (qualified) majority voting. The author, Ilievski claims that the
process of political integration could be distinguished into several phases, generally taken:

Phase 1: Ad hoc intergovernmental political cooperation: in certain fields, states cooperate

on temporary basis in certain fields under their jurisdictions.
Phase 2: Institutionalized intergovernmental cooperation – voluntary agreement of persistent
character which shapes behavior, limits the freedom of action and creates expectations about
how the participants behave.
Phase 3: Institutionalized intergovernmental coordination – synchronization of activities
among the states to cooperation;
Phase 4: Partial or supra-nationalized integration – the states have passed over a part of
their sovereignty to a supranational authority which has autonomy and may follow policies of
the member state governments;
Phase 5: Full integration – the member states have handed over the major part of their
decision-making power (―sovereignty‖), to the supranational entity and have stopped being
direct subjects of international public law.

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 Lesson Three: Waves, History and Reasons of Regional Cooperation and
Integration
 This lesson requires 3 hours in different sessions for successful accomplishment.
Lesson Objectives
After accomplishing this lesson, you will be able to:
Identify the major scientific explanations about the incremental waves and developments
of regional cooperation and integration.
Comprehend the historical evolutions of regional cooperation and integration across each
regional and wave contexts.
Identify the peculiarities and commonalities of regional cooperation and integration
across each context.
Elaborate the theoretical and scientific illustrations to the reasons why regional
cooperation and integration is taking place.

1.6. Waves and History of Regional Cooperation and Integration

Activity
Dear learner, as a process, regional cooperation and integration passes through
different historical epochs and developments. Try to associate the waves and history
of regional cooperation and integration with different regional contexts and
peculiarities.
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Regional integration has passed three major waves of development: namely, first wave,
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second wave and third wave. Regional integration has been a recognizable feature of
international trade relations in the post-war period, though its salience has waxed and waned.
Two waves of regionalism can be identified and a third may be underway.

The first wave of regional integration: This wave started with the establishment in 1957 of
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the forerunner of the European Union and, in the developing world, the adoption in Latin
America and Africa of import-substituting regional integration as the means to effect inward-
looking growth in the post war era. Most authors agree that regional cooperation and
cooperation emerged after WWW II (i.e. during the Cold War).

Most of the developing country schemes initiated at this time eventually became moribund or
collapsed, while the growing momentum of multilateral liberalization in the 1970s and 1980s
contributed to the decline in the importance attached to regionalism. The political and
economic structures of the international system are relevant for all integration processes of
the world and changes in these spheres also have the greatest impact on the context of
regional integration processes. It is focused first to study the ways how the international
system was seen to affect regional integration during the first wave. It is necessary to keep in
mind that the first serious attempts in the field of political integration were made in Europe
and therefore the theorizing on the relationship between the international system and regional
integration during the first wave was Eurocentric. The theorizing related to economic
integration, on the other hand, was concerned with the problems related to developing
countries already during the first wave.

The second wave of regional integration: is often called 'new regionalism'. With the name
'new regionalism' scholars not only separate the empirical phenomenon from the first wave of
regional integration, but also try to imply that it has qualitatively new characteristics. These
new qualitative characteristics are usually seen to ensue mainly from changes that have
occurred on the level of the international system. This differentiation between 'old' and 'new'
regionalism according to this logic implies at least the following things: First, some changes
in the international system have had an impact on the empirical phenomenon of regional
integration, and they should be thus identified. Secondly, new regionalism differs somehow
from the old regionalism, which also implies that it is possible to characterize the
phenomenon in some general manner. The simultaneous revival of interest in regional
integration in parts of the world would seem to suggest that it could be dependent on some
changes in the international system.

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The second wave of regional integration started during roughly the second half of the 1980s.
The origin of the ‗new regionalism‘ has been attributed to the drawn out nature and slow
progress of the GATT Uruguay Round negotiations, to the apparent success and fears
aroused by the EU‘s initiative aimed at establishing a Single European Market, and to the
conversion of the United States to regionalism with its negotiation of the North American
Free Trade Agreement (NAFTA) and its Enterprise for the Americas initiative which has led
to proposals for a Free Trade Area of the Americas (FTAA). In Latin America, new life was
breathed into some old integration arrangements, sometimes in the wake of political change
(the Central American Common Market and the Andean Pact) and new arrangements, such as
MERCOSUR, were created. In Asia, ASEAN embarked on plans for an ASEAN Free Trade
Area (AFTA), the South Asian Association for Regional Cooperation agreed in 1997 to
transform itself into the South Asian Free Trade Area while the Asia Pacific Economic
Cooperation (APEC) also committed to trade liberalization objectives on a non-preferential
basis. In Africa, home to the world‘s oldest customs union in Southern Africa, initiatives
have included the revitalization of existing regional groupings, the formation of new
groupings and the announcement of ambitious targets at the 36th OAU Summit in Lomé,
Togo in July 2000 to accelerate the formation of an African economic and political union.

It appears that the two most characteristic changes in the international system have been the
end of the cold war and the intensification of economic globalization. The end of the cold war
is quite a clear-cut phenomenon. The Cold War came to its end when the Soviet Bloc started
to break up in the late 1980s. As a result even the Soviet Union itself was dissolved in 1991,
which left the United States as the sole superpower in the international system. This naturally
marked also an end to the bipolar political structure of the international system, which had
characterized international politics since February 1945 and the Yalta conference. What
emerged instead of this bipolar structure is nevertheless relatively ambiguous. Politically, the
United States has remained in an unchallenged position, and therefore the political structure
of the international system is nowadays nearly unipolar. This is such a profound change that
it most likely has been reflected also in regional integration processes all over the globe.

In the international economics, the picture is much more complex than in the political sphere.
The world had been divided also economically into capitalist and state socialist camps during
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the Cold War, but the collapse of communism led to 'the end of history' also in the sphere of
economic policies. Capitalism was suddenly left without a global counter-weight and it soon
extended its sphere of influence to cover practically the whole globe. This nevertheless did
not establish a hegemonic position of the United States in the international economy. Instead,
its leading position has been challenged both by Asian and European regions, which although
accepting the hegemonic role of the US in the military and political spheres have been
reluctant to avoid conflicts with the US in the economic field. This has happened sometimes
also over such issues that have had relatively little importance (for example, the so-called
banana dispute). The post-cold war situation thus established capitalism almost as the sole
mode of production on the global scale, but this did not lead to a similar dominance of the US
as happened in international politics. Instead, three core areas of the international economy
emerged, which soon became known as the triad. These three core regions – North America,
the European Community and the Asia-Pacific - soon dominated most of the trade and
investment flows in the international economics.

The third wave of regional integration: some observers believe that a third wave of
integration is currently underway. While there were 125 RTAs notified during the GATT
years, a further 125 new RTAs have been notified since the establishment of the WTO on 1
January 1995 up to April 2002. This represents an average of 15 notifications every year to
the WTO, compared with an annual average of less than three during the four and a half
decades of the GATT. On average, each WTO Member is involved in five RTAs, though
some are parties to ten or more. According to a recent WTO study, most developing countries
now participate in RTAs. Of the 243 RTAs estimated to be in force in April 2002, between
30-40 percent are agreements concluded between developing countries.

1.7. Why Regional Cooperation and Integration?

Activity
Dear learner, can you mention some pulling and pushing reasons why states take part
in any regional cooperation and integration arrangement on the spaces provided
below?
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Regional cooperation and integration may be induced by a number of internal and external
reasons. However, those factors can be categorized into economic and political rationales.
The economic rationale for regional cooperation and integration that includes the market-size
arguments, economic transaction costs argument, technology transfer argument, the welfare
argument, the development funding argument and the globalization argument are worth
mentioning. Economic arguments for regional cooperation and integration are often seen as
more important as compared to political points of view. The political rationales for regional
cooperation and integration include: the security argument, the democratic convergence
argument, and etc. In terms of the gains to which the states are forced to join and boost
regional cooperation and integration are traditional gains and non-traditional gains from
regional integration arrangements.

1.7.1. Traditional Gains

Trade gains: If goods are sufficiently strong substitutes, regional trade agreements will cause
the demand for third party goods to decrease, which will drive down prices. In addition, more
acute competition in the trade zone may induce outside firms to cut prices to maintain exports
to the region. This will create a positive terms of trade effect for member countries. However,
the move to free trade between partners who maintain significant tariffs vis-à-vis the rest of
the world may well result in trade diversion and welfare loss. The risk of trade diversion
could be mitigated if countries implement very low external tariffs (―open regionalism‖
arrangements).

Increased returns and increased competition: Within a tiny market, there may be a trade-
off between economies of scale and competition. Market enlargement removes this trade-off
and makes possible the existence of (i) larger firms with greater productive efficiency for any
industry with economies of scale and (ii) increased competition that induces firms to cut
prices, expand sales and reduce internal inefficiencies. Given the high level of fragmentation
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in SSA, it is expected that market enlargement would allow firms in some sectors to exploit
more fully economies of scale. Competition may lead to the rationalization of production and
the removal of inefficient duplication of plants. However, pro-competitive effects will be
larger if low external tariff allows for a significant degree of import competition from firms
outside the zone. Otherwise, the more developed countries within the regional integration
scheme would most probably dominate the market because they may have a head-start. On
the other hand, current technology may be obsolete in these countries compared to current
and future needs of the regional market. Firms may then decide to re-deploy new technology
and relocate in other areas depending on factor costs. In this case, countries with the most
cost effective infrastructure and human resources would be the beneficiaries.

Investment: Regional trade agreements may attract FDI both from within and outside the
regional integration arrangement (RIA) as a result of (i) market enlargement (particularly for
―lumpy‖ investment that might only be viable above a certain size), and (ii) production
rationalization (reduced distortion and lower marginal cost in production). Enlarging a sub-
regional market will also bring direct foreign investment, which will be beneficial, provided
that the incentive for foreign investors is not to engage in ―tariff-jumping‖. This advocates
once again for the necessity to reduce protection and more specifically external tariffs.

1.7.2. Non-Traditional Gains

The theoretical as well as applied literatures indicate that there are several ―non-traditional
gains‖ from regional integration arrangements.

Lock into domestic reforms: Entering into regional trade agreements (RTAs) may enable a
government to pursue policies that are welfare improving but time inconsistent in the absence
of the RTA (e.g. adjustment of tariffs in the face of terms of trade shocks, confiscation of
foreign investment, etc.). There are two necessary conditions for an RTA to serve as a
commitment mechanism. One is that the benefit of continued membership is greater than the
immediate gains of exit and the value of returning to alternative policies. The other is that the
punishment threat is credible. Regional integration arrangements work best as a commitment
mechanism for trade policy. But RTAs can also serve to lock the country into micro and
macroeconomic reforms or democracy if (i) those policies or rules are stipulated within the

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agreement (deeper integration arrangements) and (ii) the underlying incentives have changed
following the implementation of the RTA. RIAs may be an instrument for joint commitment
to a reform agenda, but their effectiveness may be limited by the low cost of exit and
difficulties in implementing rules and administering punishment. With respect to other
macroeconomic reforms, one may argue that the degree of openness of RIAs may help
discipline in macro policies (especially if the zone shares or target a common exchange rate).

Signaling: Though entering RTAs is costly (investment in political capital and transaction
costs), a country may want to do so in order to signal its policy orientation / approach, or
some underlying conditions of the economy (competitiveness of the industry, sustainability
of the exchange rate) in order to attract investment. This may be especially important for
countries having a credibility and consistency problem.

Insurance: RTAs can also be seen as providing insurance to its members against future
hazards (macroeconomic instability, terms of trade shocks, trade war, resurgence of
protectionism in developed countries, etc.). Given that countries are in the ―same boat‖, the
insurance argument may not be an important rationale for regional arrangements between
developing countries. But with asymmetric terms-of-trade shocks (such as with oil in Nigeria
and the rest of ECOWAS), ―insurance‖ may become an important rationale for integration.

Coordination and bargaining power: Within RTAs, coordination may be easier than
through multilateral agreements since negotiation rules accustom countries to a give-and-take
approach, which makes tradeoffs between different policy areas possible. Since RTAs may
enable countries to coordinate their positions, they will stand in multilateral negotiations (e.g.
World Trade Organisation - WTO) with at least more visibility and possibly stronger
bargaining power. The collective bargaining power argument is especially relevant for the
poor and fractioned countries within a sub-region. It may help countries to develop common
positions and to bargain as a group rather than on a country by country basis, which would
contribute to increased visibility, credibility and even better negotiation outcomes.

Security: Entering RTAs may increase intra-regional trade and investment and also link
countries in a web of positive interactions and interdependency. This is likely to build trust,
raise the opportunity cost of war, and hence reduce the risk of conflicts between countries.

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Regarding security, RTAs could also create tensions among member countries since it results
in more divergence than convergence by accelerating the trend of concentration of industry in
one or a few countries. On the other hand, by developing a culture of cooperation and
mechanisms to address issues of common interest, RIAs may actually improve intra-regional
security. Cooperation may even extend to ―common defense‖ or mutual military assistance,
hence increasing global security. RIA highly increases the opportunity cost of war.

Lesson Four: Factors, Preconditions, and Sovereignty Issues of Regional

Cooperation and Integration
 This lesson requires 3 hours in different sessions for successful accomplishment.
Lesson Objectives
After accomplishing this lesson, you will be able to:
Identify the variable and permanent/constant factors that determine the very success of
regional cooperation and integration.
Explain the preconditions that must be accomplished during the rational movements
towards regional cooperation and integration arrangements.
Elaborate the dilemmas between the sovereignty issues and the quest for regional
cooperation and integration.
Explain the synergies between the factors, preconditions, and sovereignty issues in the
usual exposures of states in regional cooperation and integration.
1.10. Factors and preconditions of Regional Cooperation and Integration

Activity
Dear learner, regional cooperation and integration is an incremental process per the
above explanations. Can you mention some factors and preconditions that determine
its very successes?
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____________________________________________________________________
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States‘ regional cooperation and integration are facilitated by the following pushing factors.
Firstly, sanctity of state sovereignty is the major politico-legal factor that makes interstate
cooperation very important. Secondly, incapacity of states individually is the other factor
where states singly and individually could not run all their activities and satisfy all their
needs. Thirdly, the nature and influence of cross-regional common disadvantages is also
other factor making regional integration challenging. Fourthly, the multiple nature of cross
regional challenges such as immigration, insecurity, and illegal trade, circulation of drugs,
contraband, the circulation and smuggling of illegal weapons, is another factor. Fifthly, the
competitive nature of international relations is still the other factor calling for states in
regions to come into some kind of cooperation. Sixthly, dynamic nature of international
relations is the other factor that makes cooperation at regional level important.

Multiple preconditions exist for the formation of regional integration. This involves many
requirements, even if either of them is not necessarily required: involve in movement towards
cooperation between states and non-state actors, a gradual transfer of authority to supra
national authority, states should agree to limit their power, gradual homogenization of
values, formation of new form of political community, common values and respect for each
other, the same level of economic development with diverse resources, similar type of
political system, shared vision, having common history and similar geographical locations.

1.11. Regional Integration and State Sovereignty Dilemmas

Activity
Dear learner, can you explain the dilemmas between the need for regional
cooperation and integration and the loss/surrender of some degree of national
sovereign autonomy to the new regional supranational entity? Try to associate the
issue with British Brexit from the EU and the US‘s withdrawal from Asian Pacific
Economic Cooperation (APEC).
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_.
Sovereignty has always been regarded as a core element in International Relations and Law.
The Treaty of Westphalia, in 1648, marked the advent of the contemporary 'Doctrine of State
Sovereignty'. However, there is a dual perspective incorporating the internal and external
dimensions of the concept which may co-exist to varying degrees. As Biswaro (2011) put it,
based on Weber‘s views, Sovereign State is an institution claiming to exercise a monopoly of
legitimate force within a particular territory. Stated differently, a sovereign state is one that
exercises supreme, legal, unlimited, unrestricted, and exclusive control over a designated
territory and its population. In a similar manner, the sovereignty of a State requires
recognition by other States through mutual diplomatic dealings, and usually by membership
of a comprehensive international, regional or sub-regional organization.

Sovereignty is a quality that can be attached only to a state. However, it is in no way a

straightforward task yet to try to define what sovereignty means. Since sovereignty is related
to the concept of the state, the most obvious starting point for its definition is to define the
state. Max Weber's classical definition of the state is the most suitable starting point because
the state has been able to claim the monopoly of violence. It also has a capacity to use the
highest authority within its territory and if necessary back its authority by the use of violence.
This use of the highest authority is also the essence of state sovereignty. In other words,
sovereignty refers to the right of the state to use the highest authority within its territory. This
right has two dimensions – external and internal. Internal sovereignty refers to the legitimate
authority of the state and its institutions to use the highest authority within the territory of the
state; external sovereignty refers to the state‘s right to judicial equality and territorial integrity
in the international system, which is based on the recognition of the internal sovereignty of
the state by other states. A classical definition of sovereignty in International Relations runs
as follows: 'sovereignty is the supreme legal authority of the state to give and enforce the law
within a certain territory and, in consequence, independence from the authority of any other
state and equality with it under international law‘.

Traditionally, International Relations has been more interested in the external sovereignty,
but this should not necessarily be the case in integration studies. If we are talking about the

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concept of sovereignty in general, it means that states hold the highest authority within their
territories which means that no other actor has the right to interfere in the decision-making of
the state. This has certain consequences for the nature of the international system. It means
that there is no authority in the international system, which could supersede the state and the
state can therefore organize social life as it wishes within its territory. The absence of an
international authority means, on the other hand, that in international conflict situations the
state cannot appeal to any higher authority and there does not exist an international referee
for conflict situations. The absence of a higher authority in the international system has been
described in International Relations as anarchy, which does not refer to chaos, but only to the
absence of authority above states. In other words, states represent the highest form of
organized life in the international system, but the international system itself is a self-help
system.

Sovereignty is thus a concept, which determines the role of the state both towards the society
and towards the international system. In jurisprudence the concept of sovereignty is
sometimes divided into political sovereignty and judicial sovereignty. According to this
division, judicial sovereignty refers to indivisibility and the unlimited nature of sovereignty
and political sovereignty means the actual capacity limited by political circumstances to use
sovereignty. According to this view, the legal concept defines the legal competence of the
state towards society and the international system. It entitles states to behave in a certain way
both in their domestic and international context. The doctrine of sovereignty is largely based
on the notion of formal equality between States and the principle of non-intervention in
issues that are perceived to be strictly the domestic affairs of States.

If these points are linked to the external and internal dimensions of sovereignty, it is possible
to identify certain anomalies. The degree of control exercised by public entities is related to
the exercise of internal sovereignty. The right to enter into international agreements is related
to the exercise of external sovereignty. Control exercised over transborder movements marks
the distinction between the domestic and international system and thus also between internal
and external sovereignties. With Krasner‘s sovereignty is equal to such concepts as
autonomy and control. However, if sovereignty is understood this way it becomes difficult to

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identify truly sovereign states in the international system. Therefore, it might be more fruitful
to understand sovereignty as a right it is ‗a socially recognized capacity to decide on matters
within a state‘s domestic jurisdiction‘. If such an approach were adopted perhaps a suitable
definition for the term would be Janice Thomson‘s definition, which also includes the
external dimension: ‗sovereignty is the recognition by internal and external actors that the
state has the exclusive authority to intervene coercively in activities within its territory.‘

This definition does not differ from Morgenthau‘s definition very much, but stresses the
nature of sovereignty as a right rather than as a capacity. States hold the monopoly of the
legitimate use of force within their territories and as a result, both internal and external actors
recognize their ‗authority to intervene coercively in activities within their territories‘. As a
concept, it has essentially four typologies, namely: international legal sovereignty,
Westphalian/Vattelian sovereignty, domestic sovereignty and interdependence sovereignty.

The basic rule of international sovereignty is to recognize juridically independent territorial

entities. These entities then have the right to freely decide which agreements or treaties they
will enter into. In practice, this rule has been widely but not universally honored. Some
entities that are not juridically independent have been recognized (e.g. Byelorussia and the
Ukraine during the Cold War), and some entities that are juridically independent have not
been recognized (e.g. the People's Republic of China from 1949 to the 1970s).

The fundamental rule of Westphalian/Vattelian sovereignty is to refrain from intervening in

the internal affairs of other states. Each state has the right to determine its own domestic
authority structures. Although the principle of non-intervention is traditionally associated
with the Peace of Westphalia, of 1648, the doctrine was not explicitly articulated until a
century. In practice, Westphalian/Vattelian sovereignty has frequently been violated.

Domestic sovereignty does not involve a norm or a rule, but is rather a description of the nature
of domestic authority structures and the extent to which they are able to control activities within
a state's boundaries. Ideally, authority structures would ensure a society that is peaceful, protect
human rights, have a consultative mechanism, and honor a rule of law based on a shared
understanding of justice. Other scholars have added the fourth type, which is interdependence

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sovereignty, referring to the ability of public authorities to control trans-border movements.
Even though the above classifications exist in the ideal sovereign state system, international
legal sovereignty, Westphalian/Vattelian sovereignty, and domestic sovereignty are mutually
supportive.

Anyways, how does all this then affect regional integration? Sovereignty cannot be
understood only as a right but also as a right that brings obligations. When states cannot
fulfill their obligations rising from the possession of the right, this also naturally creates
problems for the international community, when it has to deal with problems that some state
should manage internally. It seems thus obvious that integration is a process, which affects
the state in many ways. As a result of the integration process, states hand over part of their
decision making powers and authority to a supranational level. It can be argued that, by
handing over decision-making powers and authority, states also limit their sovereignty.

From the above explanation, one can define sovereignty as the exclusive right to complete
political (judicial, legislative and/or executive) control over the people. Conventional
sovereignty is currently the only fully legitimate institutional form, but unfortunately it does
not always work. Honoring Westphalian/ Vattelian sovereignty (and sometimes international
legal sovereignty as well) makes it impossible to secure decent and effective sovereignty,
because the autonomous political incentives facing political leaders in many failed, failing, or
occupied states are perverse. These leaders are better able to enhance their own power and
wealth by making exclusionist ethnic appeals or undermining even the limited legal routine
administrative capacity that might otherwise be available.

As George M. Wachira (2007) has rightly argued, in Biswaro (2011), the increased need for
state cooperation and interactions to meet the new global challenges demands that states are
needed to review and rethink the concept of sovereignty. Today it is acknowledged that
international law, institutions and processes have compelled states to forge closer links 'to
assert and enforce broadly agreed international community policies, interests and values, such
as those concerning human rights, international peace and security, arms control,
environmental degradation, poverty, health and management of the international commons,
even when this may impinge upon a state's traditionally exclusive internal authority'. The
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implication is that whether states enter into closer integration treaties or not, there are certain
matters in which their sovereign powers will be limited in any event. On the whole, the
benefits to be derived from freely entering into treaties for a common economic, social and
political purpose, far outweigh the disadvantages. It would seem that integration is a long and
tedious process that demands sacrifice and commitment beyond individual national interests.

Member States will have to transfer sovereign powers to supranational institutions to further
common objectives gradually. It is worthy of ruminations about the end of the nation state
and the end of sovereignty have only gotten louder of late. Scholars can be found
emphatically stating that "like a mothball, which goes from solid to gas directly, I expect the
nation-state to evaporate" and the era of nation state is over. Those who envision the demise
of the nation state disagree as to whether the primary threat to its viability comes from
integrative trends (i.e. transnational links associated with globalization, cyberspace, and other
phenomenon that are causing loss of control and erosion of sovereignty) or disintegrative
trends (the proliferation of so many small, barely sustainable polities, spurred especially by
the surge in ethnic conflicts and separatists movements), or both. We could be witnessing the
emergence of either a global village or the exact opposite global villages. However, one
distinct possibility - and indeed probability - is that the nation-state system is likely to
persevere well into the twenty first century and beyond.

Despite the pressures for a relocation of authority both upward and downward, the nation-
state is still at the centre of things, engaging in a ceaseless jostling for advantage against other
nation states, that the nation-state remains the primary locus of identity of most people, and
that as new challenges emerge no adequate substitute has emerged to replace it as a key unit
in responding to global change. Indeed, this situation raises several questions that remain
unanswered.

In nutshell, the way and extent nations surrender their sovereignty to the new supranational
entity depends on whether the issue is in ―High Politics‖ (necessarily vital to state‘s
existence) or ―Low Politics‖ (not absolutely vital to state‘s existence). The high political
issues such as national security, sensitive macroeconomic policies, defense policies,
diplomatic policies and etc. bring fierce resistances on the transfer of authority to the new
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supra national entity. However, the state may give up or transfer some of its low political
issues such as cross border movement of citizens, cultural exchanges, some micro economic
interests, cross border trades and etc. to the new decision making body.
Summary
The word region stems from Latin word regio, which denotes "direction, point of the
compass", but later develops by association with regard to direct rule. Although geography
lies at the heart of most of these definitions since territoriality is its sine quo non, some
scholars define regions in nongeographic terms. Behavioral definitions emphasize that
political practice and interaction can alter a region‘s composition. Regions are politically
made in different domestic political coalitions. Other nongeographic definitions stress on
ideational or social-constructivist stress shared communal identities of states within a region.
Depending on different classifications, regions can be classified as: macro regions, micro
regions, sub-regions, cross-border regions.

Various political scientists have argued on the issues regionalism and regionalization making
the former a top-down political driven process marked by cooperation that involves primarily
the process of institution creation and is the intentional product of interstate cooperation,
policy coordination; and the latter is an economic process with trade and investment, bottom-
up, societally driven process, etc. However, regionalization is a feature of regionalism since
the boundaries between regionalism and regionalization remained porous/ blurred, even
though many other differences exist in strict / technical senses.

Cooperation signals the lowest level of multilateral commitment, and it is the weakest and
issue-focused arrangement on a temporary basis. Coordination/ harmonization is the higher
level of economic cooperation with a voluntary alignment of national policies and
investments, a higher and more formalized degree of cooperation and commitment, for an
effective lock-in arrangement as compared to simple cooperation. Regional integration is the
highest level of regional cooperation. It demands sacrifice of some extents, areas of powers
out of the ultimate decision making privileges of the state to the new supra-national organ in
the region. RI has dimensions: geographic scope, substantive coverage, and depth of
integration. It is also an outcome, a process, or both.

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Regional Integration passes a long and incremental stages from simple cooperation to full
federation from very regional, economic and political dimensions depending on the
varieties/types of integrations. It also passed through three waves and historical epochs: first,
second and third waves.

Regional cooperation and integration may be induced by a number of internal and external
reasons. This includes economic arguments: market-size arguments, economic transaction
costs argument, technology transfer argument, the welfare argument, the development
funding argument and the globalization argument. Also, it adds political arguments: the
security argument, the democratic convergence argument, and etc. In terms of the gains to
which the states are forced to join and boost regional cooperation and integration are
traditional gains and non-traditional gains from regional integration arrangements.

Sovereignty has always been regarded as a core element in International Relations and Law.
Here, sovereignty is a quality that can be attached only to a state. Sovereignty is the supreme
legal authority of the state to give and enforce the law within a certain territory and, in
consequence, independence from the authority of any other state and equality with it under
international law. As a concept, it has essentially four typologies, namely: international legal
sovereignty, Westphalian/Vattelian sovereignty, domestic sovereignty and interdependence
sovereignty; all these varieties of sovereignty affect (are affected by) regional integration.

Chapter One Self-Test Exercises

I. Say true if the statement is correct, and say false if the statement is incorrect.
1. Geographic contingency and continuities are both necessary and sufficient conditions to
objectively define a particular region.
2. Regionalization necessarily is a bottom-up, societally driven process, whereas
regionalism ―involves primarily the process of institution creation.
3. In more strict sense, harmonization is intended to address inconsistency in policy content,
whereas coordination is used to solve time-consistency issues.
4. Sovereignty and recognition are necessarily interconnected since the former is always
honored at the international stage in any form.

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5. Complete federation in regional integration level remained hypothetical since the
former‘s experiences are limited at state levels.
II. Choose the best answer from the given alternatives.
6. Identify the odd one from the given alternatives.
A. The MERCOSUR C. The Baltic
B. The Balkan D. The Horn of Africa
7. One is not the difference between cooperation and integration
A. Bottom up/ top down B. Permanent/ situational
C. Incremental/ static D. Diffusion/coordination
E. None
8. Which dimension of regional integration measures the degree of sovereignty a country is
ready to surrender from simple cooperation or coordination to deep integration?
A. Geographic scope C. Depth of integration
B. Substantive coverage D. Bottom-up integration
9. In which point of regional integration the region increasingly turns into an active subject
with a distinct identity, institutionalized actor, regional civil society, capability and
legitimacy?
A. Regional society C. Regional Complex
B. Region-state D. Regional Community
E. None
10. Which stage of integration involves a common currency and/or the harmonization and
unification of monetary, fiscal and social policies?
A. Preferential Trade Area C. Economic Union
B. Complete Federation D. Custom Union
E. Common Market
11. Identify the odd one from the given alternatives in regional integration.
A. Increased security C. Domestic reforms
B. Increased investment D. Signaling E. Insurance
12. Which aspect of sovereignty underlines that entities or states have the right to freely
decide which agreements or treaties they will enter into?
A. Interdependence Sovereignty C. International juridical sovereignty
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 B. Westphalian Sovereignty D. Domestic Sovereignty
E. Vattelian sovereignty
13. Regional cooperation and integration to be successful, it has to apply a philosophy to
boost the effectiveness of former integration steps. Identify it.
A. Pragmatism C. Permanence
B. Incremental movement D. Formality and Officiality
E. Gradualism
14. Which regional integration dimension measures how much "integrated" the EU is at a
certain point in time, with high degree of formality and special characteristics?
A. Integration as an outcome C. Integration as both process and outcome
B. Integration as a process D. Integration as a geographic scope
15. One of the following is not the advantage of regional cooperation and integration?
A. Increasing economic balkanizations
B. Augmenting of national welfares and security
C. Confronting the hindrances of globalization
D. Increasing the opportunity cost of war
E. All of the above
III. Discuss the following major points mentioned critically in your own
understanding with your own words.
16. Discuss the differences and establish similarities between and among regionalism vs.
regionalism, regional coordination vs. cooperation, regional cooperation vs. integration.
17. Identify the three waves of regional integration with practical analysis within the African
perspective.
18. What preconditions are needed to be met while getting into a particular regional
integration arrangement?
19. What makes regional integration unique from all other types of unions and coalitions?
20. Discuss the two most significant characteristic changes in the international system that
has dramatically changed the dynamics of regional cooperation and integration
since1990s.
21. Discuss the pooling and pushing reasons that force states to engage in a certain regional
cooperation and integration arrangement.
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 Chapter Two
Major Theories and Issues of Regionalism and Integration
Dear learner, there are numerous classifications and typologies of approaches on regional
cooperation and integration. For the purpose of this module, we have to classify those
approaches from two paradigms: economics based approaches and political science based
approaches, depending on Biswaro (2011) classifications.

Section One: Major Theories and Approaches to Regional Cooperation and

Integration

Lesson One: Economics-Based Approaches

 This lesson requires 5 hours in different sessions for a successful accomplishment.
Lesson Objectives
After completing this lesson, you will be able to:
Critically examine the theoretical notions of regional cooperation and integration from
economic perspectives.
Identify the similarities, differences or peculiarities of each theory on the subject matter,
regional cooperation and integration.
Critically examine the strength and weaknesses of each theoretical stance per different
scientific critics on the practical ground.
Differentiate the economic integration theories and approaches from political integration
theories and approaches.

2.1. David Ricardo’s Comparative Advantage

Activity
Dear learner, what theme do you think is at the center of David Ricardo‘s Comparative
Advantage theory on the issue of regional cooperation and integration?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_____________________________________________________________.
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In Economics, the processes of trade, integration and economic convergences are the main
driving ideas. Indeed, the theoretical foundations of conventional approaches to regional
integration, date back to three important schools of economic and political thought, namely:
neo-classical, Marxist and development economics. The earliest theoretical work on regional
integration emanated from David Ricardo's theory of comparative advantage in international
trade and the interests of liberal economists in promoting the reduction of tariff and non-tariff
barriers to trade. At issue was the choice of modalities for implementing such policies and the
effectiveness of regional integration as a mechanism of trade liberalization. According to this
theory, states have two advantages: absolute advantages and comparative advantages. Based
on the theory of comparative advantage, also known as the Ricardian model - had been that
regional agreements were beneficial to members and non- members alike, and that they
produced much the same consequences as did global trade liberalization.
Criticisms of David Ricardo’s Comparative Advantage
However, critics of free trade often posit that the comparative advantage argument for free
trade has lost its legitimacy in a globally integrated world in which capital is free to move
internationally. For example, Herman Daly (2007), a leading voice in the discipline of
ecological economics, emphasizes that although Ricardo's theory of comparative advantage is
one of the most elegant theories in economics, its application today is illogical. Free capital
mobility totally undercuts Ricardo's comparative advantage argument for free trade goods
because that contention is essentially premised on capital.

2.2. Dependency Theory

Activity
Dear learner, can you define what dependency theory is all about regarding regional
cooperation and integration, with its strengths, weaknesses and criticisms?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
________________________________________________________________.
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Based on the criticisms against David Ricardo‘s Comparative Advantage, this theory of
dependency clearly perpetuates exploitation of the South by the North. Dependency theory is
a body of social science theories both from developing and developed nations, which are
predicated on the assumption that resources flow from a 'periphery' of poor and
underdeveloped states to a 'core' of wealthy states, enriching the latter at the expense of the
former. It is a central contention of dependency theory that poor states are impoverished and
rich ones enriched by the way poor states are integrated into the 'world system.' It is the
opinion of dependency theorists that poor nations provide market access to wealthy nations
while wealthy nations actively perpetuate a state of dependence by various means.

This is based on the Marxist analysis of inequalities within the world system. Its main
proponents include Raul Prebisch, Paul A. Baran, Andrew Gunder Frank, Fernando Henrique
Cardoso and Samir Amin. The theory contrasts with the view of free market economists who
argue that free trade advances poor states on the long and enriching path to full economic
integration. Furthermore, they argue that dependency theory leads to corruption, lack of
competition, sustainability, etc. Consistent with these assumptions, many dependency
theorists correctly advocate social revolution as an effective means to reduce economic
disparities in the world system.

2.3. Security and Threats Approach

Activity

Dear learner, can you define the Security and Threats approach on the subject of
regional cooperation and integration on the spaces provided below?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
The _________.
same theorists have argued further that the normal approach to external security and
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threats is for countries to form alliances independently of any trade preferences. It is possible,
however, to commence with a trade agreement based on the hope that economic union
between the weak would ripen into political union and that by the political union of the weak,
enough power might be established to defend these weaker players from aggression. Nations
that feared being forcibly absorbed by larger states have united to forestall such coercion.

It was in this light that the Austrian Emperor proposed (but ultimately absorbed) an economic
union with Spain and Bavaria as a defensive mechanism against France in 1665. In the recent
past, the Gulf Co-operation Council (G.C.C) was established in the 1980s partly in response
to the potential threat of regional powers such as the Islamic Republics of Iran and Iraq, and
ASEAN was partly motivated by the perceived need to deter the spread of communism in
South-East Asia. Buzani's theory (1988) of shelf-life (i.e. from enmity, fear and rivalry to
amity, trust and co-operation) also underscores this point. Furthermore, a major motive of
Central and Eastern European countries in applying for membership of the EU is to gain
protection against the perceived threat from Russia. The SADCC/SADC was originally
formed in 1980 partly to provide a united front against, and reduce dependence on, apartheid
South Africa. Predominantly explanatory of European integration from the immediate post-
war era, such theories have looked at integration as driven by fear, the fear of another world
war.

2.4. Marxist School of Thought

Activity
Dear learner, what is the central theme of Marxists‘ thought on regional cooperation and
integration?
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
_________________________________________________________.

In view of regional Integration, the Marxist mode of theorization starts its premises upon the
centrality of a linkage between the modes of production and the productive forces of

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integrating units. It underscores both the need for complementarity between integrating
states, particularly in the economic arena, as well as the necessity for reciprocal realization of
the remunerations accruing from integration.

For Marxist-Leninist theorists, namely, Inotai and Benallegue, 1982 and 1987 respectively,
integration emerges as a reflection of the internationalization of capital and is intrinsic to the
evolution of the capitalist economy. They, therefore, see the creation of a Single European
Market as being the concentration of capital and the internationalization of European firms,
rather than the desire of a welfare-maximizing government to rationalize the allocation of
scarce resources among Member States. In this respect, the integration of the European
market is a consequence, not the precursor, of the transformation of production and trade in
favor of larger firms.

According to Belgian Marxist economist Ernest Mandel, economic integration in general, and
the movement toward European economic and political integration in particular, are
explained by the efforts of transnational capitalist classes to increase the scale of capital
accumulation. Over the course of modern history, the requirements of capital accumulation
have driven the world toward ever larger economic and political entities. According to this
point of view, technological developments and international competition are forcing the
dominant European capitalist class to overthrow the narrow confines of national capitalism
and forge a regional economy that will strengthen the international competitiveness of
European capitalism. Although it is appealing and sensible, economic determinism omits
certain important political and strategic motives responsible for economic integration.

2.5. Theory of Globalization

Activity
Dear learner, how do you define the essences, and relationships of the Theory of
Globalization with regional cooperation and integration?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
____________________________________.
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These two changes – the triumph of capitalism and the regionalization of the world economy
- constitute part of the change that is often called economic globalisation. David Held has
categorised three main camps in the general discussion on globalisation. The debate has
concentrated on the questions to what extent does the phenomenon hold 'global' characters
and how much new is there in this process. In other words whether the whole process exists
or not and does it represent structural change somehow. These three camps can be
characterised here briefly:

Globalists: see that globalisation is real and has qualitatively new characteristics compared
to the previous organization of the social world in the international system. Globalists see the
situation in a completely different way. According to them, economic interdependence and
international economic integration has gone so far that the international economy is
becoming truly globalized. This global economy is characterised by growing trade and
investment flows, which can be moved around the globe with the help of the new
technologies. At the same time, new technology has enabled companies to relocate their
production more easily according to their business interests.

According to some critics, this has increased the power of corporations too much. Because of
the importance of these trade and investment flows, and on the other hand, the mobility of
production has forced governments all over the globe to adopt similar economic policies
(neoliberal), the number of policy options that are available for nation-states has decreased
and thus effectively undermined their sovereignty. This situation has also given birth to a new
form of global capitalism, which is free from constraints of national or territorial constraints.
At the same time, the traditional authority of the state has not only been limited, but some of
it has been transferred to the markets and also to other actors. This situation has divided
countries into winners and losers, and being part of the global core areas guarantees better
possibilities to succeed in this globalisation race.

Traditionalists/Skeptics: are sceptical about globalisation; they see that the international
system has not undergone any fundamental changes, which could enable us to use new
concepts. The most sceptical views have denied the existence of globalisation altogether. For

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example, Hirst and Thompson have argued that there is nothing new in the current phase of
the economic internationalization. In fact, according to them, the world was more globalised
during the late 19th and early 20th century, labelled as the belle époque of globalisation, than
what it is today. Globalization of the world economy is also taken to indicate creating more
barriers than opportunities for economic globalisation according to the sceptics. Again, to the
sceptics, capitalism has not developed into a new phase, which could be called global
capitalism, but instead as various studies show that there still remain distinct forms of
capitalism in different parts of the world. Furthermore, geography has not lost its importance
either, although new technologies have been developed and trade and investment flows have
grown immensely. From this it also follows that nation-states are still able to control
economic development through different means and the present-day world just places a new
pressure on nation-states, but they have faced similar pressures throughout history. The most
extreme sceptics are perhaps now slowly fading away and the discussion is directed more
towards the question of how much globalization has changed the international system.

Transformationalists: represent the middle ground seeing the process as dynamic, and that
the consequences of globalisation are complex, diverse and unpredictable. Power is exercised
indirectly. Globalization can be controlled or ignited when needed. Culture is not a one way
flow from West to East. It is rather called ―glocalization” since cultures are transformed into
local contexts and needs. Globalization process influenced by contradictory forces and with
multiple possible outcomes rather than a fixed trajectory is leading to borderless world.
Within the stretching of political relations, political power has extended beyond the
boundaries of nation states and powers have been transferred to the international and global
scale. Yet, while international and transnational institutions have obtained responsibilities
formerly held by national governments, powers have also been devolved to sub-national
scales (re-regulation). This hollowing out of the state has resulted in a new order of
multilevel governance based on collaborative governance with nation states left to assume
new coordinating roles. In general, globalization in this respect is the reflection of
multidimensional transformation of states at different levels.

It seems obvious that some things have changed in the international economy. At least the
division into successful and peripheral regions has become more obvious. This most likely
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also has had an impact on regional integration processes all over the globe, since regional
integration /regionalisation is often seen to offer a possibility to respond to the challenges of
globalisation. This impact nevertheless is dependent on the relation between globalisation
and regionalisation. For example, according to the so-called open regionalism approach,
globalisation is inevitable and a process that challenges the nation state and national
economies in many ways. A possible solution to this problem would be regional integration
as a stepping stone on the way to global markets. On the other hand, for example, Björn
Hettne sees globalisation and regionalisation as two sides of the same coin. They are part of a
larger structural transformation, and they are mutually supportive and reinforcive. The
difference between these two approaches is that the latter seems to leave more room for
maneuvers for regional actors whereas in open regionalisation states are seen only to respond
to external pressures.

However, how globalisation affects regional integration depends naturally on how it is

defined. In this respect, the relevant question is whether it is possible for states to steer
globalisation in a certain direction (for example, with the help of regional integration) or just
to respond to the challenges it places in front of them. There seems to be a very strong
defensive reaction in regional integration in its relations to globalisation, especially among
developing countries. Division between the core periphery and semi peripheral regions in the
world has grown stronger during the last couple of decades. For example Africa has become
marginal in terms of its share of global trade and investment flows. Georg Sørensen describes
this development as uneven globalisation.

Africa is very large but very small, according to Mark D. Tomlinson. Geographically, Africa
is larger than the US, Europe, Brazil, Australia and Japan combined. GDP of 47 economies of
sub-Saharan Africa in aggregate is approximately equal to GDP of Belgium. Its median GDP
is about $4 billion, equal to a modern city‘s product per annum. Its basic services being given
is equivalent to median basic service for a population of 15million. Its infrastructure over
median land area is equivalent to France. Because of the political structures; i.e. states, have
been falling apart, and the region has faced several different major crises at the same time
(including, for example, HIV/AIDS, military conflicts, and economic marginalisation).

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Because of the instability created by these problems, Africa remains an unattractive region in
the eyes of the investors and international business world. But at the same time this
marginalization hinders the region from tackling these problems.

This same development that weakens the peripheral regions simultaneously strengthens the
core regions, because they are politically and economically stable and thus also powerful.
They can reap the fruits of a more open global economy, that is, they benefit from the process
of globalisation and are becoming even more powerful. These core regions are Europe, North
America and the Asia-Pacific. Between the core and the peripheries, there exist naturally
quite a large number of countries and regions which are more or less stable areas as well.
Nevertheless, they are not yet full members of the core regions, but still waiting to be fully
incorporated into the core, Central Eastern Europe being the prime example. The peripheral
regions, on the other hand, are economically stagnant, politically turbulent and war-prone.
Economic activity and thus also economic success seems to centre around the core regions of
the world, and being part of that economic activity has become increasingly important.
Therefore, the best strategy during the era of globalisation simply seems to be part of the core
regions.

A critical review of the globalization theory from a historical perspective attests to a fact that
integration among developing countries should be geared towards the rational use of
available resources according to a planned and centralized approach to production for the
satisfaction of the region's own needs. Despite such articulate recognition of what integration
is or should be, Africa unfortunately seems to have little to show for its integration efforts.
Most success stories of regional integration seem to be confined to those of Western Europe
and the Americas, particularly the Caribbean. Nonetheless, regional integration in South
America, especially the ANDEAN Community, is even weaker than the process in Africa,
although mercantile economics in those countries is stronger than in Africa. Guided by some
distinctly Eurocentric examples, African and other developing countries seem to confine their
efforts to mimicry rather than to originality. Perhaps the most eloquent evidence of this
Eurocentrism is the predominance of integration theories, particularly involving
functionalism and neo-functionalism, to which successful integration has been pegged.

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Related to this school, different people define regional integration through the narrower
lenses of economics. It is seen as both as a process, and as a state of affairs. We can define
economic integration as a process and state of affairs. As a process, it encompasses various
measures abolishing discrimination between economic units belonging to different nation
states. As a state of affairs, it can be represented by the absence of various forms of
discrimination between national economies.

Regional integration is an irreversible social process, which marks a definite new stage in the
global socialization of production. Explaining the class nature of the said socialization of
production, Thomas notes that this socialization will be either capitalist or socialist depending
on the concrete context of the integration itself; signifying, the further pursuit of the eventual
creation of a world system of production. Others define regional integration as a dialectical
process whereby neighboring countries with corresponding levels and degrees of productive
forces, attempt to create an institutional framework for pursuit of an eventual creation of an
integrated system of production. This seems to be influenced by circumstances in African and
Third World countries, most of which emerged as Nation-States at the peak of the Cold War.
A number of these countries had, in one way or another, adopted a Socialist- Marxist
doctrine. They were characterized by underdevelopment, and a nationalist and colonial past.

2.6. Theory of an 'Optimum' Currency Area (OCA)

Activity
Dear learner, can you explain the Theory of an 'Optimum' Currency Area (OCA) in
the context of regional cooperation and integration? Try to associate it with Euro
and identify some EU member countries that do not use this common currency.
Why?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Another theoretical subject of interest to economists has been the theory of an 'optimum'
_____________________________________________.
currency area (OCA). This theory specifies the conditions necessary for the establishment of
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a common currency within an economic region. In the case of the European Union, the
Maastricht Treaty (1991) required Member States to adopt convergence criteria, which were
designed to define the quality of integration required in order to qualify for participation in a
common European currency. States had to cut annual budget deficits of their GDP, limit total
public debt of GDP and grant their central banks independence so that they could pursue anti-
inflationary economic policies.

Optimum currency area is defined as an area in which exchange rates are immutably fixed or
in which a common currency exists. The theory basically examines the conditions under
which the formation of a currency is economically viable and hinged on money, markets for
goods and markets for factors of production. It seeks to achieve both internal and external
balance in the least costly way without compromising monetary and fiscal policies. However,
the proponents of the optimal currency area are divided as to the best avenue to achieve both
internal and external balance [i.e. Flexible or fixed exchange rates].

The first group favors the adoption of flexible exchange rates to maintain both internal and
external balance. This strand of the optimal currency area theory argues that adopting fixed
exchange rates would inevitably exacerbate unemployment and inflation, insisting that
imbalances would be eliminated by induced changes in trade and real wages. The second
group insists that payment equilibrium would be achieved if real exchange rates are fixed
thus reducing its volatility. However, both strands converge at the point that the success of a
currency area depends on the availability of high mobility of factors of production within the
region.

In general terms, optimal currency theory framework whether in the form of fixed exchanges
rates or in flexible exchange rates would not guarantee the much desired economic benefits
of ensuring both internal and external balance in form of full employment and low inflation,
as the member states‘ economies remained too weak, highly fragile and structurally truncated
with little or no influence on the international economic system.

2.7. The Customs Union Theory

Activity
Dear learner, what the Custom Union Theory is all about within the context of
regional cooperation and integration? 48 | P a g e

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_____________________________________________________________________
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The classic work on the welfare consequences of regional trade agreements is Jacob Viner's
The Customs Union Issue (1950). The pre-Viner position was that the economic gains to both
members and non-members were similar to those produced by free trade and included the
benefits of specialization, improved terms of trade, greater efficiency due to increased
competition, and increased factor flows among members. Viner analyzed that the customs
union's implications are extended for non-members.

Viner's analysis pointed out that a common external tariff would have trade-diverting as well
as trade-creating effects. The initial or static consequences of an external tariff, say, around
the European Common Market, would divert trade from foreign suppliers to suppliers located
within the Common Market. However, as Viner also pointed out, the long-term or dynamic
effects of a common market would lead to creation of a larger and wealthier European market
that would benefit not only local firms but also the market's external trading partners. Viner
concluded that this was an empirical question that could be answered only from actual
experience.

The welfare consequences for non-members could not be determined theoretically but only
by observing the specific actions and policies such as regional arrangements since neither
economic theory nor empirical evidence can tell us whether or not a specific regional
arrangement will harm non-members. No general conclusions can be drawn because of the
very different and specific aspects of each regional arrangement. Indeed, economists
unfailingly answer the question of whether regional arrangements will lead to trade diversion
or trade creation with the classic response of economists and other scholars to difficult issues.

The customs union concept forwarded the following linear successions of increasingly more
advanced stages of economic integration: preferential trade area, free trade area, customs
union, common market, economic union and political union. The market forces that come

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into play at one stage are anticipated to have a spillover effect to the next stage, so that its
implementation becomes an economic necessity. A related proposition is that because
economic integration has its own costs, resources will be misallocated if a more advanced
stage is embarked upon before a lower stage is completed. This theory includes, inter alia, the
following.

2.7.1. Concepts of Trade Creation and Trade Diversion

Biswaro (2011) mentioning Viner (1950), via his classic book on the subject, argued that
regional economic integration would lead to either Trade Creation (TC) or Trade Diversion
(TD). TC refers to replacement of high-cost domestic production by cheaper imports from a
partner, while TD measures the replacement of cheaper imports from the rest of the world by
more expensive imports from a partner. Conceptually, the term trade creation means a
situation whereby, after the removal of tariffs, the output of the inefficient industries within
the union Member States is replaced by cheaper imports from more efficient industries. In
contrast, trade diversion occurs if, prior to the establishment of the Customs Union, current
third States were the lowest-cost suppliers of goods and services to the now new Customs
Union Member States.

Trade Diversion, therefore, occurs when growth of trade between two integrating countries is
at the expense of trade that existed with a third country, and which is now reduced as a result
of trade preferences between the integrated countries. Without the preferences, trade between
the two integrated countries would not take place. Trade has been diverted from the third
party (which is efficient) to the two (neither of which can trade efficiently in the absence of
preferences). It is worth noting that national well-being is said to increase if TC exceeds TD,
and to fall if TD exceeds TC.

By reducing trade barriers between neighboring countries, customs and free trade areas could
promote economic efficiency in the allocation of resources, and contribute to the overall
growth of international trade. However, the emergence of such economic entities could also
promote trade 'diversion' and become a source of economic inefficiency, if the most
competitive producers of a particular product suddenly found themselves excluded from the

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regional market as a result of the customs union.

Criticisms of Custom Union Theory:

The Customs Union theory is not favored mainly because its implementation fosters
lopsided/uneven benefits whereby the more developed States with better economies are more
likely to benefit from the Union than the less developed ones.

2.8. Open Regionalism

2.9.Activity
Dear learner, how do you explain the very concept of Open Regionalism within the
idea of regional cooperation and integration? Compare and contrast it with
globalization.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Although certain aspects of development integration thinking are still valid for some
_.
economic academics, most are increasingly elaborating the 'open regionalism' approach.
Open regionalism is the new and dominant form of mainstream economic thinking. It is
basically an extension of the orthodox theory of regional economic integration, especially the
trade integration aspects, adjusted to a globalizing world economy. It is based on neo-liberal
and neo-classical economics and emphasizes that the integration project should be market-
driven and outward-looking; should avoid high levels of protection; and should form part of
the ongoing globalization and internationalization process of world political economy.

Open regionalism means directing policy towards the elimination of obstacles to trade within
a region, while at the same time doing nothing to raise external tariff barriers to the rest of the
world, implying that it is compatible with multilateralism. It is open in the sense that it should
contribute more to the process of global liberalization than it detracts from it (through
discrimination). The major issue is whether the formation of regional economic blocs are
'stumbling blocs' or 'building blocs' towards an open world economy. It is also open because

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it does not exclude new members. In practice these two aspects are linked, since exclusion
matters more if membership has substantial discriminatory effects.

To sum up, open regionalists conceived regionalism mainly as a trade promotion policy,
building on regional arrangements, rather than as a multilateral framework. The main
justification for open regionalism is that it contributes more to the process of global
liberalization and multilateralism than it detracts from it. The normative point of view behind
the open regionalism concept is that it at best constitutes a second-best contribution to the
task of increasing the amount of world trade and global welfare, and at worst poses a
protectionist threat to the multilateral order. Regionalism can thus be motivated, for a limited
time, by the argument that infant industries require protection, or it can be seen as a
temporary phase in a wider globalization or multilateralization process.

Lesson Two: Political Science Based Approaches

 This lesson requires 5 hours in different sessions for a successful accomplishment.
Lesson Objectives
After accomplishing this lesson, you will be able to:
Identify the political dimension of defining regional cooperation and integration from
theoretical stand points.
Identify the similarities, differences or peculiarities of each theory on the subject matter,
regional cooperation and integration.
Critically examine the strength and weaknesses of each theoretical stance per different
scientific critics from political perspective.
Differentiate the political integration theories and approaches from economic integration
theories and approaches.
In most cases, economic theories do not provide a satisfactory explanation of economic
integration. This is because economic analysts generally assume that a political decision has
been made to create a larger economic entity, and that economists need only to analyze
welfare consequences of that decision and concern themselves with just a few aspects of the
process of economic integration. Political scientists have also contributed to these theoretical
developments. They have categorized them as; inter alia, federalism, functionalism, neo-

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functionalism, neo-institutionalism, etc.

Economists tend to prefer the term 'economic integration', and more specifically differentiate
terms like 'regional economic integration' or 'international economic integration', although the
two are actually one and the same, and are normally used interchangeably. Lawyers, social
and political scientists would, mainly, exclude the economic focus; therefore, they either refer
to the term as only integration or for that matter categorize it into 'regional or international
integration. However, these distinctions are no longer decisive due to the flexibility of the
term and its ability to include all elements, although the study of one specific area is possible
without necessarily diverting from the main fundamentals of integration as presented by
different sources.

In a nutshell, it can be argued that whereas the concept of integration refers to a voluntary
process of pooling resources for a common purpose by two or more sets of partners
belonging to different states, regionalism means regional approaches to problem solving. This
could include: regional integration, regional co-operation or both. The terms 'regional
integration' and 'regional co-operation' have in common the involvement of neighboring
countries in collaborative ventures.

According to Nikola Lj. Ilievski (2015), the term integration in a political sense, it could be
understood various forms and interpretations of the term integration. It could be examined
two different differentiations that are involved in the broader term of integration in a political
sense. The first one is based on a sector variable: political integration, and economic
integration. The second one is based on a geography variable: regional integration, global
integration. Ernst Haas, eminent researcher of the European integration and neo-
functionalism, defines the political integration, as follows:
The process whereby nations forgot the desire and ability to conduct foreign and key
domestic policies independently of each other, seeking instead to make joint decisions
or to delegate the decision-making process to new central organs.
Political integration is better understood as a process towards either a political union or a
federation. Based on Haas‘s definition,

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 Political integration is the process whereby political actors with several distinct
national settings are persuaded to shift their loyalties, expectations, and political
activities towards a new center, whose institutions possess or demand jurisdiction
over the pre-existing Nation-States.

2.10. The Theory of Federalism in Regional Cooperation and Integration

Dear learner, the first theory of regional cooperation and integration from political
perspective is the theory of federalism. For better understanding, try to associate the theory
with other incoming theoretical notions here below.

Activity
Dear learner, can you define the Theory of Federalism on regional cooperation and
integration context with your critical understanding?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
In ___________________________.
a political federation, and according to the constitution, each State is sovereign in its own
right. It should be emphasized, however, that even in their loosest form, federations require
that states concede a certain degree of political jurisdiction to the federal authority. In the
broadest sense, federalism involves the linking of individuals, groups, and polities in lasting
but limited union in such a way as to provide for the energetic pursuit of common ends while
maintaining the respective entities of all parties. Federalism has to do with the constitutional
diffusion of power, so that the constituting elements in a federal arrangement share in the
processes of common policy- making and administration by right, while the activities of the
common government are conducted in such a way as to maintain their respective entities.

Indeed, there is a difference, not just of degree but of kind between a unitary State and 'a
federal polity. One way of capturing the difference is to focus on the form of 'representation'
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employed by the 'unitary State, compared with its alternatives. From this perspective, the
modern unitary State has two distinct analytical components. First, the unitary State
presupposes the idea of popular sovereignty, which is to say the idea that the people
conceived as free and equal individuals form the constituting power of that State. Second, the
unitary State, once constituted, becomes the representative of the people, who now exercise
their 'sovereignty' only indirectly. Thus, in the modern unitary State, the sovereignty of the
people is exercised on their behalf, not directly by themselves.

The federal polity modifies the form of representation present in the unitary State in an
important way. It retains the two afore-mentioned analytical components but adds a third: the
idea that the federal polity directly represents a number of constitutive Member States. A
federal polity, in other words, establishes a double form of representation. It represents
citizens conceived as members of territorially more limited 'Member States.' Rarely achieved
in practice, in its ideal form the relationship between these two levels of representation is one
of strict, constitutionally entrenched formal equality, rather than (as in the unitary State) a
relationship of hierarchy between a central political authority and its subordinate
jurisdictions.

Biswaro (2011), mentioning Haas, continues to explain that political integration, which
involves a significant amount of collective decision- making, can be achieved without aiming
at attaining a Political Union. Political integration permits Member States to retain their
identity and yet join in the organization that transcends nationality. Thus, political integration
presupposes the existence of delegated decision-making. As the process of integration
proceeds it is assumed that interests will be redefined in terms of regional rather than a purely
national orientation. It should be noted that political co-operation among Member States is a
prerequisite for a federation or union. Mukandala in Biswaro (2011), uses a fitting metaphor:
―while political federation/union constitutes a marriage, political co-operation is just a
friendship between partners‖. A process of integration can be equated to the process of
engagement between two partners.

Political co-operation is always regarded as an important means of facilitating economic

integration and also as an end in itself, eventually leading to the attainment of a political federation.
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It is worth pointing out that economic integration can lead to the emergence of features of political
integration as an unintended consequence. There are four elements that can unintentionally lead
economic integration to create potential features of political integration:

If it leads to the development of central institutions and policies (e.g. bank, parliament, court, etc.),
If the tasks assigned to these institutions are important enough to concern major groups in society;
If these tasks are quite specific; and
If the tasks are inherently expansive.

Throughout modern history, idealists have set forth schemes to solve the problem of war by
building federalist institutions to which parties will consciously and voluntarily surrender
their political autonomy and sovereign rights. Briefly, the federal approach to regional
integration presupposes the creation of a new State, through the merging of previously
existing sovereign States, with the possible creation of a world State in the long run. This is
not to advocate the idea of world Government as it has provoked previously acrimonious
debate in various circles. Syntactically speaking, federal here refers to centralization, an
amalgamation or partnership of States with the transfer of authority away from the Nation-
State to a supra-national structure. The goal of which has been to build a supra-national
authority in which the importance of the nation-state is either over-ridden or altogether
eliminated. One can even speculate that the pan-African ethos, which informed the most
fervent advocators of immediate continental union (as ―United States of Africa‖) was
informed by such logic.

The federal approach to regional integration presupposes the creation of a new State through
the merging of previous sovereign ones, with the possibility of creating a world State in the
long run. This implies concentration, amalgamation or partnership of States with the transfer
of authority away from the Nation-State to a supra-national structure. Successful cases in this
regard could include the United States of America and the United Republic of Tanzania.

Unique to the federalist approach is its propensity to give politics a central role in comparison
to variables such as economics, as other approaches tend to do. Unfortunately, this is also its
greatest weakness. The approach is accused of blatantly disregarding the indisputable

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centrality that sovereignty has traditionally enjoyed. That a State would easily forego its
territorial integrity and disregard its presumed national interest, in favor of regional or
continental political union, is an aspiration that has seldom [if ever] reached fruition or been
enduring.

For example, there is a string of failed federalism attempts, of which some have been in
Africa. These include the 1960s federal attempt of Sene-Gambia, Ghana-Guinea, Cape
Verde-Sao Tome and Principe, and the short-lived Libya-Egypt federation. During the
colonial era, the British colonialists established federations in Africa such as the Federation
of Rhodesia and Nyasaland. Rhodesia was composed of North and South Rhodesia, which
are currently Zambia and Zimbabwe, respectively. Nyasaland is now the Republic of Malawi.
However, the federation ceased after the independence of these three countries.

Elsewhere, successes have been achieved only under unusual political circumstances. The few
examples of successful federal experiments have been motivated primarily by national
security concerns. Indeed, perhaps the two most successful federal republics – Switzerland
and the United States- were created in response to powerful external security threats. In the
case of the United States, full political and economic integration were attained only after the
victory of the North over the South in the Civil War. The German federalist State resulted
from conquest by one nation (Prussia) of other German political entities. Historically,
political integration of independent political entities has resulted from military conquest or
dynastic union, and neither of these methods will necessarily lead to the creation of an
integrated economy.

2.11. Functionalism

Activity
Dear learner, can you briefly explain the concept of the Theory of Functionalism
under the contexts and perspectives of regional cooperation and integration?
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The failure of the League of Nations to maintain world peace after World War I made people
aware that something more than voluntary federalism was needed to ensure world peace. The
British social democrat David Mitrany (1966) took up this challenge and systematically set
forth his functionalist theory as a solution to the problem of war in his highly influential
monograph. David Mitrany's book A Working Peace System published in 1943 and other
writings were the keys works in the functionalist tradition. According to Mitrany, modern
economic, technological, and other developments made political integration of the world
possible and necessary. Technocratic management of an increasingly complex and integrated
global economy and social system had become imperative. Mitrany argued that the problem
of war could be solved and the war- prone system of Nation-States could be escaped through
international agreements in specific functional or technical areas such as health, postal
services, and communications.

As its name and original publishing year imply, Mitrany's book was also trying to track the
conditions which would ensure the avoidance of military conflicts in the international system.
In this sense it belongs to the same broad movement, for example, with federalism and
transnationalism, but its approach is completely different. In a sense, functionalism
challenges the state-centric worldview, and is concerned with whether nation-states are the
optimal form (most functional) of an organization to fulfill human needs. If some needs
transcend national borders, then should not the optimal way to fulfill these needs also follow
the same logic, and the organization serving that function also be transnational. According to
Ben Rosamond functionalist reasoning sees states as an impediment to the functional
organization of human activity.

Even though the political system remained fragmented into jealous and feuding nation-States,
such functional and technical international institutions were feasible because the world in the
twentieth century had become highly integrated both economically and physically by
advances in communications and transportation. Mitrany assumed that an economically and
technologically integrated world had given rise to many complex technical problems that
individual competing States could not deal with effectively.

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Then, as the new organizations proved their effectiveness in dealing with various technical
problems, States would delegate more and more tasks to international institutions. As new
functional arrangements were put into place, the realm of independent political action, and
hence international conflict, would become more and more circumscribed. There and again,
States would learn the advantages of peaceful co-operation, and the importance of political
boundaries would diminish. Political integration of the world would thus result from
economic and other forms of international co-operation. The functional approach to
integration was, therefore, partly intended by its proponents to replace the solidarity of
national interest with the promotion of common functional interest on a wide stage.
Nevertheless, the outcome has not been entirely in accordance with functionalist theory. In
spite of proliferating regional integration arrangements, the growth of international
organizations such as the UN and the Commonwealth, and the intensification of
globalization, the Nation-State still survives and there are no signs that it is in retreat.

According to functionalist reasoning the most important objective was not international
integration as such, but they rather believed in a slogan 'form follows function'. Since human
needs change over time and vary across space, also the design of institutional solutions had to
be an open-minded and flexible process. The proposed solution of the functionalists was to
establish flexible task-oriented international organizations, which could better fulfill human
needs than nation-states. At the same time, the chances of international conflict would be
considerably reduced.

Functionalist regional integration is sometimes called the gradual or step-by-step approach. It

does not necessarily seek the immediate replacement of the Nation-State by supra-national
entity. Instead, functionalism presupposes the evolution of that entity as a natural result of co-
operation that begins in areas of low politics culminating in co-operation in more complex
political fields through a gradual build-up of trust and functional spillover.
Criticism of Functionalism
Where functionalism demonstrates strength, it remains as one important milestone in the
history of the integration theory, because it set the scene for neo functionalism.
Unfortunately, it is also where it is weak, as a critic. Its assumption that gradualism would
ultimately work in areas of high politics such as national security and national interests, as it
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does in technical matters, defies reality. Functionalism has been criticized for being, among
other things, too naive, ignoring the political side of arranging international functional
organizations (by simply focusing on technical/technocratic matters), and having a poor
record of prediction.

2.12. Neo-functionalism

Activity
Dear learner, can you define the Theory of Neo-functionalism within the context of
regional cooperation and integration? Try to differentiate it with its theoretical root,
functionalism.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Haas produced books: The Uniting of Europe (1957) and Beyond the Nation- State (1964).
_____________________________.
Inspired by Mitrany's insights, Ernest Haas developed what he called 'neo-functionalism' and
applied this theory to both international institutions and the process of European integration.
Neofunctionalism's intellectual roots lie in functionalism. Drawing on literature in social
science, like Mitrany, Haas believed that modern democratic and, especially, welfare States
required rational management of the economy and centralized technocratic control. However,
for Haas, Mitrany's functionalism was too unsophisticated politically and lacked a theory of
how integration actually takes place. Whereas Mitrany had emphasized the deliberate actions
of national leaders to create international institutions, Ernst Haas, who was largely influenced
by the writings of Karl Deutsch, focused on domestic interest groups and political parties
promoting their own economic self-interest. He also stressed the unintended consequences of
previous integration efforts, which he called 'spillover'; as groups realized that integration
could serve their self-interest, there would automatically be spillover from one area of
integration to another. In the end, the process of spillover would lead to political co-operation
and a transnational political community favoring more extensive and centralized regional or
international governing mechanisms.

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Over time, the regional or global organization would be transformed from a means into an
end itself. Thus, neo-functionalist theory, like the functionalist one, believed that economic
co-operation would lead to political integration at either the regional or global level.
However, the crux of the matter is national sovereignty. As each stage of economic
integration encourages further integration at a certain point, regional integration and
globalization are dramatically opposed to each other. Neo-functionalism assumes that
economic and other welfare concerns have become, or, at least, are becoming more important
than such traditional concerns as national security and interstate rivalry. The theory assumes
as well that the experience of integration leads to redefinition of the national interest and
eventual transfer of loyalty from the Nation-State to emerging regional or global entities.

It is worth noting several ways in which neo-functionalism modified functionalism. Whereas

functionalism assumed that conscious political decisions would accelerate political
integration, neo-functionalist theory assumes that, once the process of economic and
technical integration has been launched, unanticipated consequences, spillovers from one
functional area to another and the effects of learning will propel the process toward eventual
political and economic unification. One of neo-functionalism's core positions is that the logic
of functional spillovers would push political elites inevitably from economic co-operation
toward political unification. Further, Haas observes that successful integration is co-related
with and caused by a series of factors, notably environment (e.g. industrialized economy),
structural factors (e.g. supra- national bodies which can upgrade their common interests), and
functional factors (e.g. specific economic tasks aimed at resolving policy differences
emerging from previous imperfect compromises on welfare matters).

As outgrowth of functionalism approach, neo-functionalism‘s premises are slightly more

complex. This is probably best demonstrated by one of its pillars, the postulation that 'supra-
nationality is the only method available to the State to secure maximum welfare',
underpinning the idea that there are inseparable interlinkages between the social, the
economic and the political domains. For neo-functionalists, integration evolves through a
series of processes that entail: 'Functional spillover, updating of common interests and sub-
national and supra-national group dynamics'. Neo-functionalist ideas have strongly

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influenced the thinking of scholars and public officials on European regional integration.
Neofunctionalism is usually regarded as the integration theory of EU making. Indeed, it has
been very influential for both the European integration process specifically and for the study
of international integration in general.

2.12.1. The Concept of Spill-Over

In his original formulation of the term Haas defined it as a situation where the creation and
deepening of integration in one economic sector would create pressures for further economic
integration in other sectors of the economy consciously or even unconsciously. In his book,
Lindberg tried to define the concept even more generally but in a more compact form: ‗Spill-
over refers to a situation in which a given action, related to a specific goal, creates a situation
in which the original goal can be assured only by taking further actions, which in turn create
a further condition and a need for more action, and so forth.‘

The spill-over hypothesis as a linear and progressive phenomenon was slightly redefined
later. The automaticity of functional spill-over could not be trusted completely, and
sometimes it could be 'guided' in the right direction. This is what Joseph Nye has called
'cultivated spill-over'. According to Nye, this type of spill-over takes place when some sort of
driving forces behind the integration (for example, politicians or technocrats) form coalitions,
which deliberately promote increased integration.
Criticisms of Neofunctionalism
Some of Haas's limitations lie in his theory confining the possibilities of regional integration
to developed countries, failing to explain why the necessary characteristics for regional
integration are absent in developing countries. Also, its weakness is the apparent failure to
explain how welfare maximization within an integrating Nation-State is really linked to
regional integration.

1.12. The Theory of Transactionalism

Activity
Dear learner, can you define the Theory of Transactionalism in the context of regional
cooperation and integration with your own words?
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______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Per Biswaro (2011), this model of political integration has more scientific rigour than other
classical models of political integration. Its theorizing was not based on any single historical
experience or occurrence; instead it tried to draw its reasoning from a wide body of historical
evidence. Transactionalism is strongly associated with the works of Karl Deutsch, who was a
leading researcher in a research group, which produced the landmark publication of
transactionalism, Political Community and the North Atlantic Area (1957). For
transactionalism, integration meant foremost the establishment of security communities. In a
security community the normative objective of transactionalist integration had been achieved.
By integration we mean the attainment, within a territory, of a ―sense of community‖ and of
institutions and practices strong enough and widespread enough to assure, for a ―long‖ time,
dependable expectations of ―peaceful change‖ among its population.

Deutsch distinguished two types of security communities: the so-called amalgamated and
pluralistic. In amalgamation, integration had more or less the same meaning as in other
integration models, it was a merger of two independent units into a single larger unit, which
would have a common government after amalgamation. As an example of an amalgamated
security community, Deutsch pointed out the United States. Deutsch himself appeared to
prefer the latter type of integration i.e. the establishment of pluralistic security-communities.
In pluralistic security communities, its constituent parts retained their independence, but were
yet able to establish a security community, of which the Nordic countries are a prime
example. The preferability of pluralistic security communities arose from the fact that they
were easier to attain and easier to preserve than their amalgamated counterparts.

Deutsch and his group pointed out five essential requirements, which would enable the
establishment of a security community: 1) the compatibility of the main values 2) social
communication between integrating units 3) mobility of persons between participating units
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4) multiplicity and balance of transactions 5) mutual predictability of behaviour. From the
above list, it can be easily concluded that transactions and communications were important in
the achievement of a security community. As Ben Rosamond formulates this issue, ‗the
guiding hypothesis of transactionalist work on integration was that a sense of community
among states would be a function of the level of communications between states.‘ Thus, the
potential for integration in Deutsch‘s model could be empirically measured by the level of
transactions among states. Transactionalism and the establishment of security communities
still remain central in the field of integration theory.

Criticisms of Transactionalism

It has also received its share of criticism of which perhaps the most important one relates to
the problem of the operationalization of Deutsch‘s model. This nevertheless, does not reduce
the relevance of transactionalism as such, because the achievement of ‘peaceful change‘ is
crucial for all integration projects. European states have succeeded in the establishment of a
security community and co-operation within the EU has consolidated the means of peaceful
co-operation. In a Southern African context, the attainment of a security community is still
only an objective.

1.13. Neo-Institutionalism

It influenced the writings of social scientists interested in economic and political integration.
Neo-institutionalism emphasizes the role of institutions in solving economic and other
problems. It maintains that institutions can help improve market failures and solve collective
action problems in economic and political integration. The most prominent scholar in this
school of thought is Robert Keohane who, along with others, has emphasized the need for
international institutions to deal with market failures, reduce transaction costs, and counter
other problems. Scholars argue that international institutions (or regimes) assist States to
solve collective action problems, promote co-operation through facilitation of reciprocity (tit-
for-tat strategies), and link various issue areas. In such ways, regional international
institutions increase the incentives for States to solve their disputes and cooperate with one
another. Although this position has been very influential in the development of thinking

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about regional institutions, it has not led to a specific theory of economic and political
integration.

Since there are multiple branches of institutionalism such as rational choice and cultural
institutionalism, we cannot simply understand the wider institutionalism. For rational choice
institutionalisms institutions are ‗the formal rules of the game. They become more and more
autonomous through the institutionalization of EU legal norms. Sociological approaches of
institutionalism include besides formal rules of the game, informal norms. They address the
cultural and identity aspects of institutions. It is similar to constructivist approaches in this
sense. The development of a European culture and of a special identity of civil servants
members of EU institutions impacts on their perceptions and interests. On the other hand,
constructivist scholars criticized institutionalisms for failing to explain phenomena such as
identity and preference change. One can observe the richness of perspectives through which
the process of integration and the European case in particular, have been analyzed. It is
difficult to create an overarching approach because integration is complex.

1.14. Inter-governmentalism
The most significant approach by political scientists to economic and political integration
since neo-functionalism is intergovernmentalism or, more specifically, liberal
intergovernmentalism. This approach, derived from neo- functionalism, neo-institutionalism,
and other earlier theories of political integration, shares with neo-functionalism an emphasis
on economic interests as the principal driving forces of regional integration. Like neo-
institutionalism, it stresses the importance of international [meaning regional] institutions as a
necessary means of facilitating and securing the integration process. However,
intergovernmentalism differs from earlier approaches in its concentration on the central role
of national governments, on the importance of powerful domestic economic interests, and on
bargaining among national governments over distributive and institutional issues.

The most ambitious effort to develop a theory of economic and political integration based on
intergovernmentalism is found in Andrew Moravcsik's The Choice for Europe (1998), which
concentrates on the pivotal responses for national governments to the increasing
interdependence of national economies, and emphasizes the importance of international

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institutions, that adds reciprocity (tit-for-tat) approach for states, in solving problems
generated by increasing economic interdependence.

Inter-governmentalism appeared as a reaction to neo functionalism and was rooted in two

currents: neo realism whose core ideas were that the distribution of capabilities between
member states induces differences of power, and neo liberalism, which focused on the
interaction of states‘ interests. The mostly referred version of inter governmentalism
nowadays is Moravcsik‘s liberal intergovernmentalism thesis. It is influenced by the works of
Keohane on neoliberal institutionalism. Moravcisk argues that integration goes as far as
member states want it to go and European institutions exist due to the deliberate will of
member states to satisfy their interests and are instruments for achieving member states‘
objectives. An intergovernmental view was put forward by Putnam, who viewed integration
(governance) as a two level game played by the member states. At the national level, office
holders build coalitions among domestic groups; at the regional level they bargain in ways
that enhance their position at the domestic level by satisfying demands of key interest groups.

The main view of the inter-govermentalists is that it is primarily the state actors, their interest,
their interactions, and the results of these interactions which decide the relations between the
states, the integration processes and eventual institutionalizations of this process. While the
main interests of the functionalist, transaction list and the neo- functionalist integration
theories were the processes which work "behind the back of the actors", the inter-
govermentalists interpret the integration processes as mainly decided by the states and their
interrelations. The theoretical element in this kind of explanation is very simple and very
voluntaristic.

1.15. The Theory of Realism

Activity
Dear learner, how do you define the Theory of Realism in the context of regional
cooperation and integration?
_____________________________________________________________________
_____________________________________________________________________
This_____________________________________________________________________
theory advocates that international regional organizations rational creations of states.
_____________________________________________________________________
_____________________________________________________________________
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Those organizations do have nothing to limit state‘s decisions in involuntary circumstances
of the latter. Intergovernmentalism is distinguishable from realism and neorealism because of
its recognition of the significance of institutionalization in international politics and it admits
the impact of domestic politics and those institutions upon governmental/state preferences. In
spite of the fact that quite a number of realists have written on political integration, there is
no generally accepted realist theory. Nevertheless, the realist approach does emphasize the
importance of power, national political interests, and interstate rivalries in the integrative
process. Realism regards regional integration, especially political integration, as a political
phenomenon pursued by States for national, political and economic motives. Realism, alias
State-centric realism, assumes that a successful process of economic and political integration
must be championed by one or more of the core political entities that are willing to use their
power and influence to promote the integration process.

The realist approach mentions several factors that limit peaceful economic and political
integration. Joseph Grieco, for example, stresses the importance of relative gains and of
distributive issues in State calculations. These inevitably make it very difficult to achieve the
type of long-term co-operation necessary to integration efforts. States, for example, are
unlikely to willingly compromise their national security for economic gains in a regional
arrangement. Therefore, economic and political integration may require a powerful leader
(state) that has an interest in and a capacity to promote a regional arrangement. Similar
sentiments are echoed by the political theory of hegemonic stability, i.e. some dominant
power must be there to enforce the rules of a cooperative game. These are sometimes referred
to as locomotives. E.g. Germany, Brazil, USA, South Africa, and Japan in EU, MERCOSUR,
NAFTA, SADC and APEC respectively.

Section Two: Identity and Regionalism: Controversies and Complementarities

Lesson Three: The Essences of Identity in Regional Cooperation and Integration

 This lesson requires 2 hours in different sessions for a successful accomplishment.

Lesson Objectives

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After completing this lesson, you will be able to:
Define what identity is and its typologies from different perspectives.
Identify the mutual influences of different identities: individual, national, regional, etc.
Explain different approaches and conceptions of identities in different regional settings.
Elaborate how collective identities are/can be/ formed or developed in regions.

Activity
Dear learner, can you define the meaning, roles and identifications of identity in the
context of regional cooperation and integration?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
________________________________________________________.
According to Caballero (2012), identity is a concept used both by social scientists and by
people in ordinary language in different ways. One cluster of meanings refers to what
constitutes the individuality of something that is what makes a single individual entity
distinct from another one. A second cluster of meanings is focused upon what kind of
common characteristics a class of entities might have, that is to what extent there are
similarities between members of a group. Speaking about identity can be done when talking
about people, but also when referring to groups of people, to societies, objects, geographical
regions and so on. For this purposes, it is important to stress that, for instance, ‗Europe‘ can
be talked about as a source of identity to people, but equally so one can talk about European
identity when referring to a certain geographical region.

Collective identity formation can be facilitated or inhibited by structures, but they are not
fixed exogenously by interests nor immutably defined. Structures, composed by ideational
elements as well as material ones, can be reproduced or –partially- transformed depending on
agents and contexts. Concerning regional integration projects, the collective identity
formation among the states is based notably on a ―rising interdependence‖. This can take at

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least two forms. One is an increase in the ‗dynamic density‘ of interactions due to, for
example, trade and capital flows. A second is the emergence of a ‗Common Other‘, whether
personified in an external aggressor or more abstract threat like nuclear war or ecological
collapse.

According to Risse (2000), we can now distinguish among at least three ways of
conceptualizing how supranational identities relate to other identities constituting social
groups. First, there is the ―zero sum model‖ of collective identity. Here, identification with
one social group comes at the expense of identifying with other groups. The second concept
of thinking about collective identities could be called the ―layer cake‖ model. Accordingly,
people and social groups hold multiple identities and these social identities are layered. It
then depends on the social context of interaction which of these multiple identities are
invoked and become salient. Third, there is a concept of collective identities which one could
call the ―marble cake‖ model. This concept agrees that people hold multiple identities and
that these identities are invoked in a context dependent way. Rather, the ―marble cake‖ model
suggests that collective identities enmesh and flow into each other, that there are no clearly
defined boundaries between, say, one‘s Italianness and one‘s Europeanness. The idea is that
multiple identities are nested or embedded rather than neatly layered. Maybe, one cannot
even describe what it means to be. In sum then, the ―marble cake‖ concept claims, on the one
hand, that there is much more Europeanness embedded in national, regional, or other
collective identities than is usually assumed. On the other hand, the meaning of ―Europe‖
might differ profoundly in the various national, subnational, and other contexts.

In an issue of ‗Identity and Regional Integration‘, it is appropriate to tackle the question as to

what ‗identity‘ is. With the emergence of sovereign states, also emerged the ideological belief
that people born and living within the boundaries of a sovereign state have a ‗shared identity‘
that is the basis for a collective interest and that transcends the differences that there might be
within that country (differences in class for instance or differences between regions within
the country). It was the ‗nationbuilding‘ exercises of the twentieth century that have pushed
most states into promoting a sense of homogeneity and a feeling of a singular identity. This
shared identity is the basis for nationalism and national identity. Ethic, national or religious

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identities are based upon myths and worldviews that define who is a group member (often
including also who are the group‘s enemies) and that are based upon a certain interpretation
of history. Such mythological representations can be used by political leaders to gain support
for certain ‗cause‘. This can lead people to experience their identity in a competition- game
for esteem and status within their group, where the other group‘s gain is automatically
perceived as their own loss. There are no win-win situations possible and threats are
experienced as threats to the existence of the group as a whole.

In today‘s established nations a whole set of habits in everyday life constantly ‗flag‘ the
nation in the lives of people. This appears in political discourses, but also in cultural products
and even in banal things such as the structuring of newspapers. Consequently, an identity is
to be found in the embodied habits of social life. To ‗have‘ a national or political identity is to
possess ways of talking about nationhood.

Some authors have addressed that question, ‗What is identity‘ more directly for instance, has
defined political identity as the ‗set of images of the world, of values and principles that we
recognise to be ours: in as much as we share them we feel like ‗we‘. It is not something that
can be established from outside the group… it must be felt as such in a more or less clear
manner by the group‘s members, who engage in private exchange and public debate about
how to determinate those values and to modify them when circumstances have changed and
require a change of consciousness. Different approach can be raised, emphasising the non-
essential nature of identity. The author, Von Busekist (2004), mentioned in Slocum and Van
Langenhove (2015), wrote, ―An analysis of ‗collective identity‘ must be attentive to the
following six traits:

It is dynamic and consequently dependent on the context and on the individuals that
compose it.
It is constructed and consequently dependent upon entrepreneurs (individuals or
institutions).
It rests on a tradition or a collective, acceptable and legitimate statement of this tradition
(which can nonetheless be questioned, critiqued and finally give rise to a new tradition),
and as a result it maintains a particular relation to history.
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 It maintains a close relation to the system of (political) values in which it moves, whether
that is a relation of approbation or rejection, in an internal or international system…
It draws borders, and consequently has an interior and an exterior of common recognition,
an in- group and an out-group, friends and adversaries…
Finally, it possesses a centre, a central motif as in music or a pertinent common
denominator that permits individuals to recognise and articulate their attachment when it
is conscious.

Since the establishment of the Westphalian world order (1648), which parceled the world into
discrete national territories that are ‗sovereign‘ nation states, people have commonly referred
to themselves and others with respect to which of these national parcels they are citizens of.
Some have argued that the ‗national identities‘ that emerged are ‗natural‘ forms of identity.
Others point out that, as a product of the Westphalian system, they are relatively new
creations; yet to say, ‗I‘m Belgian‘, ‗He‘s Spanish‘ or ‗They‘re American‘ quickly became
second nature. Ordinary ways of speaking and experiencing the world – or the habitus, to use
the term – will be suffused with nationalist meanings, creating an environment in which it
seems ‗natural‘ to possess national identities‖. But, with the processes of regional integration,
other territorial identities – such as Europe –have gained importance.

Concomitant to globalisation, regional integration has been seen as a process that challenges
the concept of the sovereign nation state and, along with it, these corresponding ‗national
identities‘. There are three important assumptions in this Westphalian paradigm that are being
challenged in the processes of globalisation and regional integration: state sovereignty,
citizenship and territorialism/geographical boundedness. These assumptions regarding
nationstates have also often been underlying in studies of (national) identities.

Slocum and Van Langenhove discussed on the extent the processes of regional integration
have an effect upon people‘s identity. However, the two processes – regional integration and
identity construction – can be mutually influential. Changes in governance can lead to
changes in how we think (and talk) about ourselves; similarly changes in our identity
constructions can promote new conceptions of how we govern ‗ourselves‘ and who ‗us‘ is.
The Human Development Report 2004 has stated that it is a myth to believe that people‘s
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ethnic or regional identities compete with their attachment to the state and that hence there is
a trade-off between recognising diversity and unifying the state. This is indeed a myth as
identity is not some kind of zero-sum-game: individuals can and do ‗have‘ multiple identities
that are complementary and subject to the discursive spaces that are being created. This not
only holds for national and subnational identities, but also for supranational regional
identities.

Summary
Approaches regarding regional cooperation and integration can be classified across two
categorical stances: economics based approaches and political science based approaches.
From economics perspective, the earliest theoretical work on regional integration emanated
from David Ricardo's theory of comparative advantage in international trade and the interests
of liberal economists in promoting the reduction of tariff and non-tariff barriers to trade.
Based on the theory of comparative advantage/Ricardian model - had been that regional
agreements were beneficial to members and non- members alike. The theory of dependency
clearly perpetuates exploitation of the South by the North, after basing itself on the criticisms
of David Ricardo‘s Comparative Advantage. It is the opinion of dependency theorists that
poor nations provide market access to wealthy nations while wealthy nations actively
perpetuate a state of dependence by various means. The world system stood in support of the
core at the expense of the periphery or the poor.

The security and threat approach to regional cooperation and integration stresses on trade
agreement or any alliances based on the hope that economic union/alliances between the
weak would ripen into political union and that by the political union of the weak, enough
power might be established to defend these weaker players from aggression. Per the Marxist-
Leninist theorists, integration emerges as a reflection of the internationalization of capital and
is intrinsic to the evolution of the capitalist economy. Integration of the market is a
consequence, not the precursor of the transformation of production and trade in favor of
larger firms. The current mode of regional integration is inherently exploitative of the poor.

Following the triumph of capitalism and the regionalization of the world economy -
constitute part of the change called economic globalisation. Three main camps of
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globalization: [hyper globalism, skepticism, and transformationalist] exist; the central theme
of this issue is that the relations between regional integration and globalizations are seen
differently per different interpretations. However, very strong defensive reactions are coming
against regional cooperation/integration in its relations to globalisation, especially among
developing countries. The theory of an 'optimum' currency area (OCA) specifies the
conditions necessary for the establishment of a common currency within an economic region.
Exchange rates will be immutably fixed [fixed vs. flexible], both internal and external
balances will maintained, full employment and low inflation rates will be created if the region
adopts OCA.

According to Custom Unions Theory, common external tariff would have trade-diverting as
well as trade-creating effects. Viner analyzed that the customs union's implications are
extended for non-members. This theory includes linear successions of increasingly more
advanced stages of economic integration: preferential trade area, free trade area, customs
union, common market, economic union and political union. Open regionalism is a theory
directing policy towards the elimination of obstacles to trade within a region, while at the
same time doing nothing to raise external tariff barriers to the rest of the world. Open
regionalists conceived regionalism mainly as a trade promotion policy, building on regional
arrangements, rather than as a multilateral framework.

From Political Science perspective, the federal approach presupposes the creation of a new
State through the merging of previous sovereign ones, with the possibility of creating a world
State in the long run. Unique to the federalist approach is its propensity to give politics a
central role in comparison to variables such as economics, as other approaches tend to do.
Functionalism as a theory strived to maintain world peace after World War I made people
aware that something more than voluntary federalism was needed to ensure world peace.
Modern economic, technological, and other developments made political integration of the
world possible and necessary. The problem of war could be solved and the war- prone system
of Nation-States could be escaped through international agreements in specific functional or
technical areas. Always, form follows function.

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It is worth noting several ways in which neo-functionalism modified functionalism. Neo-
functionalist theory, like the functionalist one, believed that economic co-operation would
lead to political integration at either the regional or global level. Neo-functionalists‘ core
positions is that the logic of functional spillovers would push political elites inevitably from
economic co-operation toward political unification. For transactionalism, integration meant
foremost the establishment of security communities. In a security community the normative
objective of transactionalist integration had been achieved. It can be easily concluded that
transactions and communications were important in the achievement of a security
community.

Neo-institutionalism emphasizes the role of institutions in solving economic and other

problems. Regional international institutions increase the incentives for States to solve their
disputes and cooperate with one another. Intergovernmentalism derived from neo-
functionalism and neo-institutionalism, etc. on an emphasis on economic interests,
institutions as the principal driving forces of regional integration respectively. The main view
of the inter-govermentalists is that it is primarily the state actors, their interest, their
interactions, and the results of these interactions which decide the relations between the
states, the integration processes and eventual institutionalizations of this process. The theory
of realism advocates that international regional organizations rational creations of states.
Those organizations do have nothing to limit state‘s decisions in involuntary circumstances.
Realism regards regional integration, especially political integration, as a political
phenomenon pursued by States for national, political and economic motives.

As identity issue is the central concept in defining regional cooperation and integration, we
can distinguish among at least three ways or models in conceptualizing how supranational
identities relate to other identities constituting social groups: zero-sum model, layer-cake
model, and marble-cake model. Concomitant to globalisation, regional integration has been
seen as a process that challenges the concept of the sovereign nation state and, along with it,
these corresponding ‗national identities‘. There are three important assumptions in this
Westphalian paradigm that are being challenged in the processes of globalisation and
regional integration: state sovereignty, citizenship and territorialism/geographical
boundedness. These assumptions regarding nationstates have also often been underlying in
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studies of (national) identities.

Chapter Two Self-Test Exercises

I. Say true if the statement is correct, and say false if the statement is incorrect.
1. Comparative advantage argument for a globally integrated world in which capital is free
to move internationally for members and non-members alike produced no disapproval.
2. Per the Custom Union theory, Trade Diversion outcomes are the most desirable issues for
better regional cooperation and integration processes.
3. Per the Marxist stands, the integration of the capitalist market is a consequence, not the
precursor, of the transformation of production and trade in favor of larger firms.
4. Per Global Skeptics, globalization of the world economy is also taken to indicate creating
more opportunities than barriers for economic globalisation where geography,
territorialism and sovereignty declined.
5. Since Open Regionalism is the elimination of obstacles to trade within a region, also
doing nothing to raise external tariff barriers to the rest of the world, makes it identical
with globalization.
II. Choose the best answer from the given alternatives.
6. Identify the odd one from the given alternatives.
A. Raul Prebisch C. Fernando Henrique Cardoso
B. Andrew Gunder Frank D. Ernest Haas
E. Samir Amin
7. Which federation is different from others at least in accomplishments?
A. Sene-Gambia, Ghana-Guinea C. Libya-Egypt federation.
B. Cape Verde-Sao Tome and Principe D. Rhodesia and Nyasaland.
E. Tanganyika-Zanzibar
8. What makes intergovernmentalism different from (neo) realism in the thinking of
regional cooperation and integration?
A. Making states/goverenmnets as major actors
B. Its central belief in economy and institutionalism over politics
C. Making political motives as major priorities
D. Voluntaristic establishments of regional bodies
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 E. All of the above
9. Which best explains realism in regional cooperation and integration?
A. States are the only unitary actors in the process
B. States are one of the major actors in the process
C. Global and regional organizations can decide upon states‘ fate
D. Power politics and security got secondary importance than economics
E. None of the above
10. Identity alias regional identity or else depends on the social context of interaction which
of these multiple identities are invoked and become salient. Identify the model?
A. Layer-Cake model
B. Marble-Cake model
C. Collective identity
D. Zero-Sum model
E. None
11. Deutsch identified amalgamated and pluralistic security communities in the theory of
transactionalism. Identify those examples for the respective communities.
A. African Community/European Community
B. Balkan Community/Latin American Community
C. United States of America/Nordic Countries‘ Communities
D. Middle Eastern Community/Scandinavian Community
E. None of the above
III. Discuss the following major points mentioned critically with your own words.
12. What makes Functionalism different from Neo-functionalism?

13. Differentiate realism and neo-realism on regional cooperation and integration.

14. Differentiate classical liberalism and neo-liberalism on regional cooperation and
integration.
15. Discuss the three important assumptions in this Westphalian paradigm that are being
challenged in the processes of globalisation and regional integration.
16. What is the concept and relevance of ―spillover‖ in regional cooperation and integration?
17. Discuss on the roles of identities on regional cooperation and integration.

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18. Discuss the difference between institutionalism and neo-institutionalism on regional
cooperation and integration.
19. Discuss the defensive reactions being given against the equitability of globalization
between and among world states.
20. Critically define the major critics being given against the propositions and stands of each
approach and theory on regional cooperation and integration.

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 Chapter Three
Cases of Regional and Sub- Regional Cooperation and Integration from
other Continents

3.1 Globalization and Regional Integration

Introduction

Dear students, this chapter, chapter three, basically discusses about the conceptual
frameworks including concepts related to regional cooperation and integration between
regional and sub-regional organizations. Furthermore, the chapter incorporated relevant
issues concerning regional and sub-regional organizations that had played a great role under
globalization. Integration and cooperation between organizations is facilitating globalization.
Interregional flows and networks of interaction within all realms of social activity from
cultural to economical on different regional levels from global, regional, sub-regional to
local. It is driven by five dimensions. These are economic, political, democracy, ecological,
and cultural. Also it involves in different aspects such as economic integration; the transfer of
policies across borders; the transmission of knowledge; cultural stability; the reproduction,
relations, and discourses of power; it is a global process, a concept, a revolution, and an
establishment of the global market free from socio-political control. This leads to create tight
cooperation and integration in between countries. That is why the need for the creation of
regional and sub- regional organizations. An individual‘s political ideology, geographic
location, social status, cultural background, and ethnic and religious affiliation provide the
background that determines how globalization is interpreted.

In this globalized and inter linked system both regional and sub-regional organizations have
played great role in different issues and areas. Some regional organizations are African
Union, European Union, and Arab League. Sub-regional organizations include COMESA,
SADC, ECOWAS, ASEAN, and NAFTA and others.

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Chapter Objectives:
After the end of this chapter, you will be able to achieve the following objectives:
 Explain the relationship between globalization and regional integration.
 List regional and sub-regional organizations more concerning on Africa‘s issue.
 Enumerate the benefit of integration
 Identify regional and sub-regional organizations
 Compare and contrast different organizations
 Explain the role of regional and sub-regional organizations
Lesson one:
3.2 Regional and sub-regional organizations
Lesson objectives
Dear students, after the end of this lesson you will be able to achieve the following specific
objectives:
Section One: Major Regional Organizations

To give brief explanations about the historical back ground of EU

write down clearly an overall structures and organs of EU

Explain the basic principles of EU

Dear students, this Session requires 3 Hours

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Brain storming Questions
Back to your preceding knowledge, then list some regional and sub-regional organizations:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
_____________________________________________________________________________

3.2.1 European Union/ EU

Currently, the European Union (EU) is consisting of 28 member states that are subject to the
obligations and the privileges of the membership. Every member state is part of the founding
treaties of the union and is subjected to binding laws within the common legislative and
judicial institutions. In order for the EU to adopt policies that concern defence and foreign
affairs, all member states must agree unanimously.

Extension to the above, European Union (EU) is a political and economic community of
twenty-eight, United Kingdom leaving on March 29, 2019 after its citizens voted pro such
decision on June 2016, states with supranational and inter-governmental features, located
primarily in Europe, established by the Treaty on European Union (the Maastricht treaty). It
was strongly founded on November 1, 1993 in Maastricht, Netherlands. Before 1993, the EU
was not as big as it is today. European countries started to cooperate economically since
1951, when only states such as Belgium, France, Luxembourg, Germany, The Netherlands
and Italy participated. Gradually, more countries decided to join. The last to join is Croatia in
2013. It is the most powerful international organization so far in history, in some ways
resembling a state; some legal scholars believe that it should not be considered as an
international organization at all, but rather as a regional organization.

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List of 28 European Union member states

Austria (1995) Estonia (2004) Poland (2004) Portugal (1986)

Belgium (1958) Finland (1995) Netherlands (1958) Romania (2007)

Bulgaria (2007) France (1958) Malta (2004) Slovakia (2004)

Croatia (2013) Germany (1958) Luxembourg (1958) Slovenia (2004)

Cyprus (2004) Greece (1981) Lithuania (2004) Spain (1986)

Czech Republic (2004) Hungary (2004) Latvia (2004) Sweden (1995)

Denmark (1973) Ireland (1973) Italy (1958)

 United Kingdom (1973) – (Leaving on March 29, 2019 after its citizens voted pro
such decision on June 2016) under the BREXIT mechanism.

The political climate after the end of World War II favored unity in Western Europe, seen by
many as an escape from the extreme forms of nationalism which had devastated the
continent. One of the first successful proposals for European cooperation came in 1951 with
the European Coal and Steel Community. This had the aim of bringing together control of the
coal and steel industries of its member states, principally France and West Germany. This
was with the aim that war between them would not then be possible, as coal and steel were
the principle resources for waging war. The Community's founders declared it "a first step in
the federation of Europe". The other founding members were Italy, and the three Benelux
countries Belgium, the Netherlands, and Luxembourg.
3.2.1.1. Two Additional Communities Created in 1957
a) The European Economic Community (EEC) establishing a customs union, and

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 b) The European Atomic Energy Community (EAEC) for cooperation in developing
nuclear energy.
In 1967 the Merger Treaty created a single set of institutions for the three communities,
which were collectively referred to as the European Communities, although more commonly
just as the European Community (EC). In 1973 the European Communities enlarged to
include Denmark, the Republic of Ireland and the United Kingdom. Norway had negotiated
to join at the same time but a referendum rejected membership and so it remained outside.
Greece, Spain and Portugal joined in the 1980s.

In 1985 the Schengen Agreement created largely open borders without passport controls
between those states joining it. In 1986 the European flag was adopted by the Communities
and leaders signed the Single European Act. This revised the way community decision
making operated in light of its greater membership, aimed to further reduce trade barriers and
introduce greater European Political Cooperation. In 1990 after the fall of the Iron Curtain,
the former East Germany became part of the Community as part of a newly reunited
Germany. With enlargement toward Eastern Europe on the agenda, the Copenhagen criteria
for candidate members to join the European Union were agreed.

The Maastricht Treaty came into force on 1 November, 1993. Maastricht established a
revised structure and the name 'European Community' officially replaced the earlier
'European Communities'. The European Community now formed one of three pillars of the
new European Union, which included co-operation in matters of foreign policy and home
affairs. The term European Union generally replaced the term European Community, which
will be abolished by the Treaty of Lisbon along with the pillar system.

In practice, the European Community is simply the old name for the European Union.
Legally, however, they must be distinguished. The European Union has no legal personality;
it is not an international organization, but a mere bloc of states. The European Community is
one of three international organizations these states are members of the other two are the
European Coal and Steel Community and the European Atomic Energy Community. These
three organizations used to have separate institutions; but in 1961 they were merged, though
legally speaking they are still separate organizations.
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Austria, Sweden and Finland joined in 1995. The Amsterdam Treaty in 1997 amended the
Maastricht treaty in areas such as democracy and foreign policy. Amsterdam was followed by
the Treaty of Nice in 2001, which revised the Rome and Maastricht treaty‘s to allow the EU
to cope with further enlargement to the east. In 2002 euro notes and coins replaced national
currencies in 12 of the member states. In 2004 ten new countries (eight of which had
formerly been Eastern Bloc countries) joined the EU. At the start of 2007 Romania and
Bulgaria joined the EU and the euro was adopted by Slovenia. On 1st January 2008, Malta
and Cyprus joined the Euro zone.
A treaty establishing a constitution for the EU was signed in Rome in 2004, intended to
replace all previous treaties with a new single document. However, it never completed
ratification after rejection by French and Dutch voters in referenda. In 2007, it was agreed to
replace that proposal with a new Reform Treaty that would amend rather than replace the
existing treaties. This treaty was signed on 13 December 2007 in Lisbon and will be known
as the Lisbon treaty. It will come into effect in January 2009 if ratified by that date.

The EU creates a single market by a system of laws which apply in all member states,
guaranteeing the freedom of movement of people, goods, services and capital. It maintains a
common trade policy, agricultural and fisheries policies, and a regional development policy.
In 1999 the EU introduced a common currency, the euro, which has been adopted by fifteen
member states. It has also developed a role in foreign policy, and in justice and home affairs.
Passport control between many member states has been abolished under the Schengen
Agreement.

Europe is in the midst of a long-term process of political and economic integration that is slowly
eliminating the importance of borders and centralizing authority and resources. To be sure, the
European Union (EU) is not yet an amalgamated polity with a single centre of authority. Nor does
Europe have a military capacity commensurate with its economic resources ( Kupchan, A.C.,
2002:199-208).
 Write short notes on the establishment of EU?

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3.2.1.2 Organs and Various Institutions of the European Union
a) The European Parliament
 The voice of the people
Members of the European Parliament (MEPs) are directly elected by EU citizens to represent
their interests. Elections are held every five years and all EU citizens over 18 years old (16 in
Austria) some 380 million are entitled to vote. The Parliament has 751 MEPs from all 28
Member States. The official seat of the European Parliament is in Strasbourg (France),
although the institution has three places of work: Strasbourg, Brussels (Belgium) and
Luxembourg. The main meetings of the whole parliament are known as ‗plenary sessions‘,
take place in Strasbourg 12 times per year. Additional plenary sessions are held in Brussels.
Committee meetings are also held in Brussels.
 The Parliament has three main roles:
1. It shares with the Council the power to legislate to pass laws. The fact that it is a directly
elected body helps guarantee the democratic legitimacy of European law.
2. It exercises democratic supervision over all EU institutions, and in particular the
Commission. It has the power to approve or reject the nomination of the President of the
Commission and Commissioners, and the right to censure the Commission as a whole.
3. It shares authority with the Council over the EU budget and can therefore influence EU
spending. At the end of the budget procedure, it adopts or rejects the budget in its entirety.
a) The European Council
The European Council brings together the EU‘s top political leaders, i.e. Prime Ministers and
Presidents along with its President and the President of the Commission. They meet at least
four times a year to give the EU as a whole general political direction and priorities. The
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High Representative of the Union for Foreign Affairs and Security Policy also takes part in
the work of the European Council.

 The main concern of European Council

As a summit meeting of the Heads of State or Government of all the EU Member States, the
European Council represents the highest level of political cooperation between the Member
States. At their meetings, the leaders decide by consensus on the overall direction and a
priority The European Council does not adopt legislation.

At the end of each meeting it issues ‗conclusions‘, which reflect the main messages resulting
from the discussions and take stock of the decisions taken, also as regards their follow-up.
The conclusions identify major issues to be dealt with by the Council, i.e. the meetings of
ministers. They may also invite the European Commission to come forward with proposals
addressing a particular challenge or opportunity facing the Union, and provide the necessary
impetus for its development. European Council meetings as a rule take place at least twice
every six month. Additional (extraordinary or informal) meetings may be called to address
urgent issues in need of decisions at the highest level, for example in economic affairs or
foreign policy.
b) The Council
In the Council, ministers of EU Member States meet to discuss EU matters, take decisions
and pass laws. The ministers who attend these meetings have the authority to commit their
government to the actions agreed in the Council meetings.
 The major concern of the Council
The Council is an essential EU decision-maker. Its work is carried out in Council meetings
that are attended by one minister from each of the EU‘s national governments. The purpose
of these gatherings is to: discuss, agree, amend and, finally, adopt legislation; coordinate the
Member States‘ policies; or define the EU‘s foreign policy.
There are 10 different Council Configurations:
Chaired by the High Representative of the Union for Foreign Affairs and Security Policy:
 Foreign Affairs Chaired by the Member State holding the Presidency of the Council:
 General Affairs
 Economic and Financial Affairs
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  Justice and Home Affairs
 Employment, Social Policy, Health and Consumer Affairs
 Competitiveness (Internal Market, Industry, Research and Space)
 Transport, Telecommunications and Energy
 Agriculture and Fisheries
 Environment
 Education, Youth, Culture and Sport
Five key Responsibilities of the Council:
1. To pass European laws in most fields, it legislates jointly with the European
Parliament;
2. To coordinate the Member States‘ policies, for example, in the economic field;
3. To develop the EU‘s common foreign and security policy, based on guidelines set
by the European Council;
4. To conclude international agreements between the EU and one or more states or
international organizations;
5. To adopt the EU‘s budget, jointly with the European Parliament
c) The European Commission
It is politically independent institution that represents and upholds the interests of the EU as a
whole. In many areas it is the driving force within the EU‘s institutional system. It proposes
legislation, policies and programmes of action and is responsible for implementing the
decisions of the European Parliament and the Council. It also represents the Union to the
outside world with the exception of the common foreign and security policy
In the context of the above paragraph, the term ‗Commission‘ is used in two senses. The first
one, it refers to the ‘Members of the Commission’ i.e. the team of men and women appointed
by the Member States and the Parliament to run the institution and take its decisions.
Secondly, the term ‗Commission‘ refers to the institution itself and to its staff.

Informally, the Members of the Commission are known as ‗Commissioners‘. They have all
held political positions and many have been government ministers, but as members of the
Commission they are committed to acting in the interests of the Union as a whole and not
taking instructions from national governments. The Commission remains politically
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answerable to the parliament, which has the power to dismiss it by adopting a motion of
censure. The Commission attends all the sessions of the Parliament, where it must clarify and
justify its policies. It also replies regularly to written and oral questions posed by Members of
Parliament.
The day-to-day work of the Commission is done by its administrative officials, experts,
translators, interpreters and secretarial staff. Commission officials like the staff of other EU
bodies are recruited via the European Personnel Selection Office (EPSO)
(http://europa.eu/epso). They are citizens from every EU Member State, selected by means of
open competitive examinations. There are approximately 33,000 people working for the
Commission. That may sound a lot, but in fact it is fewer than the number of staff employed
by most medium-sized city councils in Europe.
The European Commission has four main roles:
a. To propose legislation to the Parliament and the Council;
b. To manage and implement EU policies and the budget;
c. To enforce European law (jointly with the Court of Justice);
d. To represent the Union around the world.

 How the European Commission works?

It is the Commission President to decide which Commissioner will be responsible for which
policy area, and to reshuffle these responsibilities (if necessary) during the Commission‘s
term of office. The President is also entitled to demand a Commissioner‘s resignation. The
team of 28 Commissioners (also known as ‘the College’) meets once a week, usually on
Wednesdays in Brussels. Each item on the agenda is presented by the Commissioner
responsible for that policy area, and the College takes a collective decision on it.

The Commission‘s staff is organized into departments, known as Directorates General (DGs)
and services (such as the Legal Service). Each DG is responsible for a particular policy area
for example, DG Trade and DG Competition and is headed by a director-general who is
answerable to one of the Commissioners. It is the DGs that actually devise and draft the
Commission‘s legislative proposals, but these proposals only become official when ‗adopted‘
by the College at its weekly meeting. The procedure is roughly as follows. Suppose, for
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example, that the Commission sees a need for EU legislation to prevent pollution of Europe‘s
rivers.
The Directorate-General for the Environment will draw up a proposal, based on extensive
consultations with all interested parties, such as European industry and farmers, with
environment ministries in the Member States and with environmental organizations. Many
proposals are also open to public consultation, enabling individuals to provide views in a
personal capacity, or on behalf of an organization. The proposed legislation will then be
discussed with all relevant Commission departments and amended if necessary. It will then
be checked by the Legal Service. Once the proposal is complete, the Secretary-General will
put it on the agenda for a forthcoming Commission meeting. At meeting, the Environment
Commissioner will explain to his or her colleagues why this legislation is being proposed,
and they will then discuss it. If there is agreement, the College will adopt the proposal and the
document will be sent to the Council and the European Parliament for their consideration.
However, if there is disagreement among the Commissioners, the President may ask them to
vote on it. If the majority is in favour, the proposal will be adopted. Thereafter it will have the
support of all the Commission members.
d) The National Parliament
 Enforcing Subsidiarity
The EU institutions are encouraging the national parliaments to become more involved in the
activities of the European Union. Since 2006, the Commission has been transmitting to
national parliaments all new legislative proposals, and has replied to their opinions. With the
Lisbon Treaty from 2009, the rights and duties of national parliaments within the EU are
clearly set. National parliaments can express their views on draft legislative acts as well as on
other matters which may be of particular interest to them.
Moreover, EU actions are subject to the principle of subsidiarity. This means that the Union
only acts where action will be more effective at EU level than at national level. Where the
treaties have given exclusive powers to the EU, this is considered to be the case, but
otherwise it is a judgment that is made for each new law. Correct application of this principle
in EU decision-making is monitored by national parliaments. To enable parliaments to carry
out subsidiarity checks, the Commission sends draft legislation to national parliaments at the

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same time as it forwards it to the Union legislator (i.e. the European Parliament and the
Council).

Any national parliament may then give a reasoned opinion if it considers that the proposal in
question does not comply with the principle of subsidiarity. Depending on the number of
reasoned opinions issued by national parliaments, the Commission may have to re-examine
its proposal and decide whether to maintain, adjust or withdraw it. This is referred to as the
yellow and orange card procedure. In the case of the ordinary legislative procedure, if a
majority of national parliaments give a reasoned opinion, and provided that the Commission
decides to maintain its proposal, it will have to explain its reasons, and it will be for the
European Parliament and the Council to decide whether or not to continue the legislative
procedure. National parliaments are also directly involved with the implementation of EU
legislation. EU directives are addressed to the Member States. They must make them part of
national law, which is mostly decided by national parliaments. The directives lay down
certain end results that must be achieved in every Member State by a specified date. National
authorities have to adapt their laws to meet these goals, but are free to decide how to do so.
Directives are used to bring different national laws into line with each other, and are
particularly common in matters affecting the operation of the single market (e.g. product
safety standards).
e) The court of Justice
 Upholding EU laws
The Court of Justice of the European Union (the Court) ensures that EU legislation is
interpreted and applied in the same way in each Member State in other words, that it is
always identical for all parties and in all circumstances. To this end, the Court checks the
legality of the actions of the EU institutions, ensures the Member States comply with their
obligations and interprets EU law at the request of national courts.
The Court has the power to settle legal disputes between Member States, EU institutions,
businesses and individuals. To cope with the many thousands of cases it receives, it is divided
into two main bodies: the Court of Justice, which deals with requests for preliminary rulings
from national courts, certain actions for annulment and appeals, and the General Court, which
rules on all actions for annulment brought by private individuals and companies and some
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such actions brought by Member States. A specialized tribunal, the Civil Service Tribunal,
also adjudicates in disputes between the EU and its civil servants.
Concerns of the Court
The Court gives rulings on cases brought before it. The four most common types of case are
listed below:
1. The Preliminary Ruling
The courts in each EU Member State are responsible for ensuring that EU law is properly
applied in that country. If a national court is in any doubt about the interpretation or validity
of an EU law it may, and sometimes must, ask the Court of Justice for advice. This advice is
given in the form of a binding ‗preliminary ruling‘. This ruling is an important channel for
citizens, through their national courts, to establish how far EU laws affect them.
2. Infringement Proceedings
The Commission, or (in some rare cases) a Member State, can initiate these proceedings if it
has reason to believe that a certain Member State is failing to fulfill its obligations under EU
law. The Court investigates the allegations and gives its judgment. If found to be at fault, the
accused Member State must set things right without delay to avoid the fines the Court can
apply.
3. Proceedings for Annulment
If any of the Member States, the Council, the Commission or (under certain conditions) the
Parliament, believes that a particular EU law is illegal they may ask the Court to annul it.
These ‗proceedings for annulment‘ can also be used by private individuals who want the
Court to annul a particular law because it directly and adversely affects them as individuals.
4. Proceedings for Failure to act
The treaty requires the European Parliament, the Council and the Commission to make
certain decisions under certain circumstances. If they fail to do so, the Member States, other
EU institutions and (under certain conditions) individuals or companies can lodge a
complaint with the Court so as to have this violation officially recorded.
What are the mechanisms of the Court?

The Court of Justice is composed of 28 Judges, one from each Member State, so that all the
EU national legal systems are represented. The Court is assisted by nine ‗Advocates General‘
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who present reasoned opinions on the cases brought before the Court. They must do so
publicly and impartially. The Judges and Advocates General are either former members of
the highest national courts or highly competent lawyers who can be relied on to show
impartiality. They are appointed by joint agreement of the Member State governments. Each
is appointed for a term of six years. The Judges of the Court select a President who serves for
three years. The Court of Justice can sit as a full Court, a Grand Chamber of 13 Judges or
Chambers of five or three Judges, depending on the complexity and importance of the case.
Nearly 60 % of cases are heard by Chambers of five Judges and around 25 % by Chambers of
three Judges.

The General Court is also composed of 28 Judges, appointed by the Member States for 6-year
terms. The Judges of the General Court also elect a President among themselves for a three
year term. This Court sits in Chambers of three or five Judges (sometimes a single Judge) to
hold hearings. Around 80 % of General Court cases are heard by three Judges. A Grand
Chamber of 13 Judges, or a full Chamber of 28, may meet if the complexity or importance of
the case justifies this.

All cases are submitted to the Registry at the Court and a specific Judge and Advocate
General are assigned. After submission, there are two steps: first, a written stage and then an
oral stage. In the first stage, all the parties involved submit written statements and the Judge
assigned to the case draws up a report summarizing these statements and the legal
background to the case. This report is discussed at the Court‘s General Meeting which
decides the judicial formation that will hear the case and whether oral arguments are
necessary. Then comes to the second stage the public hearing where the lawyers put their
case before the Judges and the Advocate General, who can question them. After the oral
hearing, the Advocate General assigned to the case draws up his or her opinion. In the light of
this opinion, the Judge draws up a draft ruling which is submitted to the other Judges for
examination.

The Judges then deliberate and deliver their judgment. Judgments of the Court are decided by
a majority and pronounced at a public hearing. In most instances the text is available in all
official languages of the EU on the same day. Dissenting opinions are not expressed. Not all
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cases follow this standard procedure. When the urgency of a case so dictates, simplified and
expedited procedures exist which allow the Court to rule within approximately three months.

f) The European Central Bank

 Ensuring price stability
The purpose of the European Central Bank (ECB) is to maintain monetary stability in the
euro area by ensuring low and stable consumer price inflation. Stable prices and low price
inflation are considered vital for sustained economic growth as they encourage enterprises to
invest and create more jobs thus raising living standards for Europeans. The ECB is an
independent institution and takes its decisions without seeking or taking instructions from
governments or other EU institutions.
The ECB was set up in 1998, when the euro was introduced, to manage monetary policy in
the euro area. The primary objective of the ECB is to maintain price stability. This is defined
as a consumer price inflation rate of less than, but close to, two % per annum. The ECB also
acts to support employment and sustainable economic growth in the Union. To carry out its
lending operations, the ECB holds and manages the official foreign reserves of the euro area
members. Other tasks include conducting foreign exchange operations, promoting efficient
payment systems in support of the single market, approving the production of euro banknotes
by the euro area members and collating relevant statistical data from the national central
banks. The President of the ECB represents it at relevant high-level EU and international
meetings.
How the ECB works?
The European Central Bank is an institution of Economic and Monetary Union (EMU) to
which all EU Member States belongs. Joining the euro area and adopting the single currency
the euro is the final phase of EMU. Not all EU Member States belong to the euro area: some
are still preparing their economies to join, and others have opt-outs. The ECB stands at the
core of the European System of Central Banks, which brings together the ECB and the
national central banks of all EU Member States. The organization of the ECB reflects this
situation in its three main groupings.
 The General Council of the European System of Central Banks comprises the governors
of the 28 National Central Banks, together with the ECB President and Vice-President.

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 The Executive Board of the ECB consists of the President, the Vice-President and four
other members all appointed by the European Council, acting by a qualified majority, for
Eight year terms of office. The Executive Board is responsible for implementing
monetary policy, the bank‘s day-to-day operations and preparing Governing Council
meetings as well as exercising certain powers delegated to it by the Governing Council.
 The Governing Council of the ECB comprises the six members of the ECB Executive
Board and the Governors of the National Central Banks of the 19 euro area members:
together they form the Euro-system. The Governing Council is the main decision-taking
body of the ECB and meets twice a month. As a rule, at its first meeting each month, the
Governing Council assesses economic and monetary developments and takes its monthly
monetary policy decisions. At its second meeting, the Council mainly discusses issues
related to other tasks and responsibilities of the ECB.
g) The European Court of Auditors
 Helping to Improve EU financial management
The European Court of Auditors (ECA) is the independent external audit institution of the
European Union. It checks that the Union‘s income has been received correctly, that its
expenditure has been incurred in a legal and regular manner, and that financial management
has been sound. It performs its tasks independently from the other EU institutions and
governments. In doing so, it contributes to improving the management of European Union
funds in the interests of its citizens.
What the European Court of Auditors does?
The European Court of Auditors‘ main role is to check that the EU budget is correctly
implemented in other words, that EU income and expenditure is legal and regular, and
financial management is sound. This work helps to ensure that the EU is managed efficiently
and effectively. To carry out its tasks, the ECA undertakes detailed audits of EU income or
expenditure at all levels of the administration of EU funds. It carries out on-the spot checks at
the organizations managing the funds, or the beneficiaries receiving them, both in the EU
Member States and in other countries. Its findings are published in annual and specific
reports, which draw the attention of the Commission and the Member States to errors and
weaknesses found, and make recommendations for improvement.

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Another key function is for the European Court of Auditors to help the budgetary authority
(the European Parliament and the Council) by providing them with an annual report on the
implementation of the EU budget for the previous financial year. The ECA‘s findings and
conclusions in this report play an important role in the Parliament‘s discharge decision on the
Commission‘s handling of the budget. The European Court of Auditors also gives its opinion
on new or revised EU regulations with financial impact at the request by the other EU
institutions. The ECA can also issue position papers on other issues on its own initiative.

What are the mechanisms of the European Court of Auditors?

The European Court of Auditors operates as a collegiate body of 28 Members, one from each
EU Member State. The Members are appointed by the Council, after consultation with the
European Parliament, for a renewable term of six years. They are chosen for their
competence and independence, and work full-time for the ECA. They elect one of their
number as President for a term of 3 years.
To be effective, the Court of Auditors like any other supreme audit institution must remain
independent of the institutions and bodies it audits. The ECA is free to select its audit topics,
the specific scope and approach to be followed; decide how and when to present the results of
its selected audits; and choose the publicity to be given to its reports and opinions. These are
important elements of independence.
The European Court of Auditors is divided into chambers, which prepare the reports and
opinions for adoption by the ECA. The chambers are supported by qualified staff originating
from all Member States. The auditors frequently audit in the other EU institutions, the
Member States and other beneficiary countries. The ECA also cooperates closely with
supreme audit institutions in the Member States. Indeed, although the ECA‘s work largely
concerns the EU budget for which the Commission retains overall responsibility in practice,
management of over 80 % of expenditure is shared with national authorities.
The European Court of Auditors has no judicial powers but through its work brings
irregularities, weaknesses and cases of suspected fraud to the attention of the EU bodies
responsible for taking action, including the European Anti-Fraud Office (OLAF). Since its
creation in 1977, the ECA has made a significant impact on the financial management of the

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 EU budget through its objective reports and opinions. In doing so, it has fulfilled its role of
independent guardian of the financial interests of the citizens of the Union.
h) The European Economic and Social Committee (EESC)
 The voice of Civil Society
The European Economic and Social Committee (EESC) is an advisory body of the European
Union. It is a unique forum for consultation, dialogue and consensus between representatives
from all the different sectors of ‗organized civil society‘, including employers, trade unions
and groups such as professional and community associations, youth organizations, women‘s
groups, consumers, environmental campaigners and many more. The members of the EESC
are not bound by any mandatory instructions and work in the Union‘s general interest. The
EESC thus acts as a bridge between the EU institutions and EU citizens, promoting a more
participatory, more inclusive and therefore more democratic society in the European Union.
 The EESC has three key tasks:
 To advise the European Parliament, the Council and the European Commission;
 To make sure the views of civil society organizations are heard in Brussels and to
increase their awareness of the impact of EU legislation on the lives of EU citizens;
 To support and strengthen organized civil society both inside and outside the EU.

How it works?
The EESC is made up of 353 members from 28 EU Member States. The members come from
all social and professional backgrounds and have a vast range of knowledge and experience.
They are appointed by the Council for a term of five years on a proposal by Member States
but they work independently for the EESC in the interests of all EU citizens. Members are
not based full-time in Brussels: most continue to do their own jobs in their home countries,
which mean they can stay in touch with people ‗back home‘.
The members of the Committee are organized internally into three groups:
a) ‗employers‘,
b) ‗workers‘ and
c) ‗Various interests‘.

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The aim is to build consensus between these groups so that EESC opinions truly reflect the
economic and social interests of EU citizens. The EESC elects its President and two Vice-
Presidents for a term of 2½ years. EESC members meet nine times a year in plenary sessions
in Brussels where opinions are approved by simple majority voting.
i) The Committee of the Regions
The voice of local government
The Committee of the Regions (CoR) is an advisory body composed of representatives of
Europe‘s regional and local authorities. It gives the regions of Europe a say in EU policy-
making and checks that regional and local identities, competences and needs are respected.
The Council and the Commission must consult the CoR on matters that concern local and
regional government, such as regional policy, the environment, education and transport.

How it works?
The Committee members are elected municipal or regional politicians, representing the entire
range of local and regional government activities in the EU. They may be regional presidents,
regional parliamentarians, town councilors or mayors of large cities. They all have to hold a
political office in their home country. EU governments nominate them, but they work with
complete political independence. The Council appoints them for five years, and they may be
reappointed. The CoR appoints a President from among its members, for a term of 2½ half
years.
CoR members live and work in their home regions. They meet in Brussels five times a year
in plenary sessions, during which policy is defined and opinions are adopted. Six specialist
commissions, made up of CoR members and covering different policy areas, prepare the
plenary sessions:
 Commission for Territorial Cohesion Policy (COTER);
 Commission for Economic and Social Policy (ECOS);
 Commission for Sustainable Development (DEVE);
 Commission for Education, Youth, Culture and Research (EDUC);
 Commission for Environment, Climate Change and Energy (ENVE);
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  Commission for Citizenship, Governance, Institutional and External Affairs
(CIVEX);
 Commission for Natural Resources (NAT).
CoR members are also grouped into national delegations, one for each Member State.
Interregional groups also exist to promote cross-border cooperation. In addition, there are
four political groupings.
K) The European Ombudsman
Investigating your complaints
The European Ombudsman investigates complaints about cases of poor or failed
administration (maladministration) by the EU institutions. The Ombudsman receives and
investigates complaints from EU citizens, residents, businesses and institutions.
What the Ombudsman does?
The Ombudsman is elected by the European Parliament for a renewable term of five years.
By receiving and investigating complaints, the Ombudsman helps to uncover
maladministration in the European institutions and other EU bodies in other words, cases
where an EU institution fails to do something it should have done, or does it in the wrong
way, or does something that ought not to be done. Examples of maladministration include:
 Unfairness;
 Discrimination;
 Abuse of power;
 Lack or refusal of information;
 Unnecessary delay
 Incorrect procedures.
Any citizen or resident of an EU Member State can make a complaint to the Ombudsman, as
can any association or business. The Ombudsman only deals with EU institutions and bodies,
not with complaints against national, regional or local government authorities or institutions.
It operates completely independently and impartially and does not request or accept
instructions from any government or organization.
Often, the Ombudsman may simply need to inform the institution concerned about a
complaint in order for it to resolve the problem. If the case is not resolved satisfactorily
during the course of his inquiries, the Ombudsman will try, if possible, to find an amicable

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solution which puts right the case of maladministration and satisfies the complainant. If this
fails, the Ombudsman can make recommendations to solve the case. If the institution
concerned does not accept his recommendations, he can make a special report to the
European Parliament.
l) The European Data Protection Supervisor
Protecting your privacy
In the course of their work, the European institutions may store and process personal
information on EU citizens and residents in electronic, written or visual format. The
European Data Protection Supervisor (EDPS) is charged with protecting this personal data
and people‘s privacy, and with promoting good practice in this field among the EU
institutions and bodies.
Basic tasks of the EDPS are:
Monitoring the EU administration‘s processing of personal data;
Advising on policies and legislation that affect privacy;
Cooperating with similar authorities in the Member States to ensure consistent data
protection.
Protection of this information is a fundamental right.
Supervise the data protection activities and systems of the EU institutions and to
ensure they comply with best practice.
m) The European Investment Bank
 Investing in the future
The European Investment Bank (EIB) is the Bank of the European Union. It is owned by the
Member States and its mission is to lend money for investments that support the Union‘s
objectives for example, in the fields of energy and transport networks, environmental
sustainability and innovation. The EIB‘s focus is on increasing Europe‘s jobs and growth
potential, supporting climate action and supporting the EU‘s policies beyond its borders.
Within the EU, the priorities for the EIB‘s lending activities are:
Innovation and skills,
Access to finance for smaller businesses,
Climate action,

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 Trans-European networks for transport, energy and IT.
The EIB’s decisions are taken by the following bodies.
The Board of Governors consists of ministers (normally the finance ministers) from
all the Member States. It defines the Bank‘s general lending policy.
The Board of Directors, chaired by the President of the Bank, comprises 29 members,
28 appointed by the Member States and one by the European Commission. It
approves lending and borrowing operations.
The Management Committee is the Bank‘s full-time executive body. It handles the
EIB‘s day-to-day business.
3.2.1.3 Some of the main policies of the European Union include:
a) Free trade of goods and services among member states.
b) A common external customs tariff and a common position in international trade
negotiations.
c) Removal of border controls between its member states (excluding the UK and Ireland,
which have derogations)
d) Freedom for citizens of its member states to live and work anywhere within the EU,
provided they can support themselves
e) Freedom for its citizens to vote in local government and European Parliament elections in
any member state
f) Free movement of capital between member states
g) Harmonization of government regulations, corporations law and trademark registrations
h) A single currency, the Euro (excluding the UK, Sweden and Denmark, which have
derogations)
i) Common agricultural and fisheries policies.
j) Co-operation in criminal matters, including sharing of intelligence (through EUROPOL
and the Schengen Information System), agreement on common definition of criminal
offences and expedited extradition procedures
k) A common foreign policy

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l) A common security policy, including the creation of a 60,000-member Rapid Reaction
Force for peacekeeping purposes, an EU military staff and an EU satellite centre (for
intelligence purposes)
m) A common policy on asylum and immigration
n) A common system of indirect taxation, the VAT, as well as common customs duties and
excises on various products
o) Funding for the development of disadvantaged regions (structural and cohesion funds)
p) Funding for programs in candidate countries and other Eastern European countries, as well
as aid to many developing countries
q) Funding for research
Generally speaking, European Union policies are divided into three main areas, called pillars.
1st) The first or 'Community' pillar concerns economic, social and environmental
policies.
2nd) The second or 'Common Foreign and Security Policy (CFSP) pillar concerns
foreign policy and military matters.
rd
3 ) The third or 'Justice and Home Affairs' (JHA) pillar concerns co-operation in the
fight against crime.
Within each pillar, a different balance is struck between the supranational and
intergovernmental principles. Supra-nationalism is strongest in the first pillar, while the other
two pillars function along more intergovernmental lines. In the CFSP and JHA pillars the
powers of the Parliament, Commission and European Court of Justice with respect to the
Council are significantly limited, without however being altogether eliminated.
3.2.1.4 Integration and EU
Important institutions of the EU include the European Commission, the European Parliament,
the Council of the European Union, the European Council, the European Court of Justice and
the European Central Bank. The European Union is composed of 27 independent sovereign
countries which are known as member states: Austria, Belgium, Bulgaria, Cyprus, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy,
Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. Four Western European

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countries that have chosen not to join the EU have been partly integrated into the EU's
economy; Iceland, Liechtenstein and Norway are a part of the single market through the
European Economic Area, and Switzerland has similar ties through bilateral treaties. The
microstates' relationships can include use of the euro and other co-operation.
There are three official candidate countries, Croatia, Macedonia and Turkey; the western
Balkan countries of Albania, Bosnia and Herzegovina, Montenegro and Serbia are officially
recognized as potential candidates. To join the EU, a country must meet the Copenhagen
criteria, defined at the 1993 Copenhagen European Council. These require a stable
democracy which respects human rights and the rule of law; a functioning market economy
capable of competition within the EU; and the acceptance of the obligations of membership,
including EU law. Evaluation of a country's fulfillment of the criteria is the responsibility of
the European Council.
The present day Europe is an outcome of partitioning and repartitioning that took place over a
long period of historical process before and after the two world wars. The latest of these
events took place following the collapse of the Former Soviet Union. The often irrational
process of drawing political boundaries without consulting the affected people has resulted,
much like in Africa, in the division of ethnic groups, communities and cultures with all the
attendant barriers and obstacles that negatively affected the aspirations, harmonious life,
social and economic development of the peoples astride these borders.
The initial establishment of the unity of Europe by the six founding members (Belgium,
France, The Federal Republic of Germany, Italy, Luxembourg and the Netherlands) had the
basic objectives of post-world war reconstruction and the avoidance of the recurrence of war
in Europe by ensuring that no state emerged powerful enough to pose a threat to others.
However, it was the Treaty of Rome in 1957 that established the European Economic
Community (EEC), which greatly extended the areas of convergence in the union. The
common policies included trade and common external tariff, the Common Agricultural
Policy, the EEC External policy, the single European currency and the European Monetary
Union, among others. Its membership has increased to 27 since its establishment in the
1950s. The accession was driven by the Enlargement policy particularly during the years
following the end of the cold war that created opportunities for changes in political and
economic systems in the former socialist countries.
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The EU Regional policy has the fundamental objective of bringing about social and economic
cohesion among member states and regions. It aims at the abolition of internal borders and
the creation of a single EU market which is at the core of the Union's objectives of creating a
single market and a political union. It has been evolving in response to the political,
economic and social dynamics particularly since the accelerated process of enlargement
progressed over the past 15 years. The EU pursues the integration and cohesion process
through the promotion of regional and interregional and CBC, both within the internal
borders and its adjacent external frontiers as well as neighboring countries, through complex
regional and cross-border policies, programmes, instruments and procedures of eligibility.

Initially the regional policy was applied to promote European integration by assisting
member states and regions that were economically below the European average (Ireland,
Italy, Greece, Spain, Portugal) through a range of structural funds, mainly the European
Social Fund (ESF) and the European Regional Development Fund (ERDF). The measures
have often resulted in positive outcomes in narrowing the development gap among members.
The most cited, in this respect, is the case of Ireland in achieving rapid development. At the
same time, the policy also promoted the growth of what are generally known as Euro-regions
across the internal borders of the members. These are association of communities, local
regional authorities on either side of the borders established to promote or cooperate in areas
of common interests. The structures and legal status of the Euro-regions ranged from simple
cross-border consultative of communities to structures established through inter-
governmental agreements.1 The subsequent accession of more and more European countries,
particularly after the enlargement that brought ten poorer members in 2005, had also the
impact of widening the economic disparity among member countries and extending the
external borders of the Union. This development further led to the expansion of the regional
policy objectives and innovation of the instruments through a reform process to reflect the
new realities. As a result, cross-border intra-regional and Inter-regional cooperation attained
greater focus in programmes which integrated earlier instruments and procedures in response
to the dynamics. The present European Regional programme covering the period 2007-2013
under the European Neighborhood Programme Initiative (ENPI) is an outcome of such policy
and instrument consolidation process.
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The ENPI builds on the experience of the structural and social funds that financed CBC
programmes within the internal borders, inter-regional and intra-regional cooperation
encompassing neighbors on the external frontiers of the EU. The present programme aims:
1) At a balanced regional development in the internal borders through support to
infrastructural and human development cooperation to strengthen integration and
convergence;
2) At developing competitiveness in view of global challenges and enhance
employment through support to such cooperative areas as in research and IT development;
3) At fostering cross-border and interregional cooperation to ensure the borders with
the new neighbors extended as the result of the enlargement do not pose as social and
economic dividing lines. The scope of this component includes what is generally referred to
as the partner countries along the land and sea borders of the EU and possibly even countries
that do not share such borders under special association arrangements.
One of the most significant aspects of the EU CBC experiences is the role played by the
major European Institutions. The Council of Europe (CE) and the EU were the driving forces,
in different but complementary competencies, behind the development and success of the
Regional and CBC programmes. Both institutions have the overarching aim of promoting
balanced regional development and progressive removal of internal and external boundary
barriers. The major focus of the CE is to facilitate the adoption of legislations, using its
position of influence among members, in order to provide the legal recognition to regional
and sub-regional bodies vital for forging local CBC cooperation initiatives. Such legislations
governing CBC have contributed significantly in accelerating initiatives in CBC. The CE was
instrumental in realizing the European Outline Convention on Trans-frontier Cooperation that
provided the legitimacy of cross-border agreements and arrangement initiatives. It also
actively promotes CBC through sensitization, convening of conferences at different levels
and implementing capacity building programmes. The major role of the EU is the all familiar
use of its power in financing CBC initiatives and programmes through the development of
targeted programmes at various levels, defining guidelines, criteria and providing the vital
funding. The ENPI 2007-2013 budgetary allocation is set at Euro 1.181 billion.

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The EU CBC experience is unique in that it is based on the core objectives of the Union, the
achievements of the basic prerequisites of a single market and the existence of political will
to reduce sovereign prerogatives in the interest of common objectives. Although, these are
largely to be yet attained in Africa, applicable good practices can be found in the EU CBC
experience particularly over the last fifteen years. The EU cross border programme has
inspired the ECOWAS to initiate its own CBC programme using some of the aspects of the
EU model. Most of these remain valid as elements of basic good practices for other regions
as well. The most fundamental of these are the followings.

 The basic concept that CBC is a tool that fosters economic, social and cultural
development in cross border areas through joint local government and non
government stakeholders.
 CBC is initiated, planned and implemented by local entities on the basis of their
common interests and priorities.
 Cross border cooperation progressively eliminates borders and reduces them to their
administrative functions thereby removing the barriers that economically, socially and
culturally divide people that share common interests, cultures, religions, languages
and heritage.
 CBC contributes to the diffusion of tensions, conflicts and promotion of peace and
stability.
 The importance of subscribing to legal framework with due consideration to national
laws and constitutions by the cooperating governments in order to give legitimacy to
local entities that enables them to expeditiously cooperate in cross-border activities.
 The principles of independent financing and co-financing as well as equality of
partners ensure local joint strategies and programmes are based on common interest
and owned by local partners, irrespective of size, economic importance or population
of either of the cooperating countries.
Institutions are driving forces of CBC in Europe in the wider sense. Primarily the Union's
institutions in their respective competencies have provided critical support to the
development of CBC in tune with the changing circumstances. The Council of Europe, using
its legislating power has been the prime force behind the Madrid Convention that is
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governing CBC. It has also played important advisory and promotional role to the expansion
of CBCs. The European Commission's role in providing funds through targeted and strategy
based financing of CBC has equally, if not more, contributed to the acceleration of CBC
within the EU and beyond. Although it is difficult to conceive the applicability of the
structures and mandate of these institutions, at present, within the settings in Africa, they
provide lessons in terms of the importance of finance and legislation within the context of
CBC. However, important and applicable lessons could be learnt from the other types of
institutions that abound in European border areas created for the purpose or to support CBC.
These are the joint cross border local entities such as the joint community, professional
associations, NGOs etc.; and at regional levels, bodies organized as Euro regions in a variety
of cross border initiatives and activities.

Self-Check Exercise

 Briefly discus about the historical background of EU

________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________
 List organs of EU and select only one then discus about.
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________

 Write short note on of EU

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________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________

 List down the basic policies of European Union

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________

 What are the basic objectives/activities of EU?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

 Differentiate European Union and European Community

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

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___________________________________________________________________________
____________

 Is European Union limited only to the affairs of economics?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________

Lesson two:
3.3. North American Free Trade Agreement (NAFTA)
Lesson Objectives:
Dear students, after the successful completion of this session, you will be able to:
 List the objectives of NAFTA
 Identify the myth and facts of NAFTA
 Explain the long-term strategies of NAFTA
Dear students, this section requires 3 Hours
Brain storming Questions
In which continent NAFTA is exists? What was the reason for the establishment of
NAFTA?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

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NAFTA fuels economic growth and dynamic trade, stimulates investment while creating
productive partnerships, works for small and medium-sized businesses and provides fairness
and certainty. NAFTA partners promote environmental protection, and provide greater job
opportunities in North America.
3.3.1. The Major Objectives of NAFTA
The objectives of this Agreement, as elaborated more specifically through its principles and
rules, including national treatment, most-favored-nation treatment and transparency, are to:
a) Eliminate barriers to trade in, and facilitate the cross-border movement of, goods and
services between the territories of the Parties;
b) Promote conditions of fair competition in the free trade area;
c) Increase substantially investment opportunities in the territories of the Parties;
d) Provide adequate and effective protection and enforcement of intellectual property rights
in each Party's territory;
e) Create effective procedures for the implementation and application of this Agreement, for
its joint administration and for the resolution of disputes; and
f) Establish a framework for further trilateral, regional and multilateral cooperation to expand
and enhance the benefits of this Agreement.
3.3.2. NAFTA’s – Myth and Facts
Different ideas have been suggested towards the effectiveness of NAFTA. Some say that has
so many myths than practical results. Others on the other hand highly believed on the
practical good effect of it. So, the following points are/ include both myth and the facts of
NAFTA.

 Myth 1: after 14 years, NAFTA has not achieved its core goals of expanding trade
and investment between the U.S., Canada, and Mexico
Fact:
From 1993 to 2007, trade among the NAFTA nations more than tripled, from $297 billion to
$930 billion. Business investment in the United States has risen by 117 percent since 1993,
compared to a 45 percent increase between 1979 and 1993.

 Myth 2: NAFTA has cost the U.S. jobs

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 Fact:
U.S. employment rose from 110.8 million people in 1993 to 137.6 million in 2007, an
increase of 24 percent. The average unemployment rate was 5.1 percent in the period 1994-
2007, compared to 7.1 percent during the period 1980-1993.

 Myth 3: NAFTA has hurt America’s manufacturing base

Fact:
U.S. manufacturing output rose by 58 percent between 1993 and 2006, as compared to 42
percent between 1980 and 1993. Manufacturing exports in 2007 reached an all time high with
a value of $982 billion.

 Myth 4: NAFTA has suppressed U.S. wages

Fact:
U.S. business sector real hourly compensation rose by 1.5 percent each year between 1993
and 2007, for a total of 23.6 percent over the full period. During 1979-1993, the annual rate
of real hourly compensation rose by 0.7 percent each year, or 11 percent over the full 14-year
period

 Myth 5: NAFTA has not delivered benefits to U.S. agriculture

Fact:
Canada and Mexico accounted for 37% of the total growth of U.S. agricultural exports since
1993. Moreover, the share of total U.S. agricultural exports destined for Canada or Mexico
has grown from 22% in 1993 to 30% in 2007. NAFTA access is most crucial for agriculture,
where Mexico has its highest MFN tariffs. Mexico is the top export destination for beef, rice,
soybean meal, corn sweeteners, apples and dry edible bean exports. It is the second export
market for U.S. corn, soybeans and oils, and third largest for pork, poultry, eggs, and cotton.

 Myth 6: NAFTA has reduced wages in Mexico

Fact:
Mexican wages grew steadily after the 1994 peso crisis, reached pre-crisis levels in 1997; and
have increased each year since. Several studies note that Mexican industries that export or

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that is in regions with a higher concentration of foreign investment and trade also have higher
wages.

 Myth 7: NAFTA investment provisions have put legitimate U.S. laws and
regulations at risk
Fact:
Nothing in NAFTA‘s investment provisions prevents a country from adopting or maintaining
non-discriminatory laws or regulations that protect the environment, worker rights, health and
safety, or other public interest. The United States has never lost a challenge in the cases
decided to date under NAFTA, nor paid a penny in damages to resolve any investment
dispute. Even if the United States were to lose a case, it could be directed to pay
compensation but it could not be required to change the laws or regulations at issue.

 Myth 8: NAFTA has done nothing to improve the environment

Fact:
NAFTA created two bi-national institutions unique to the agreement which certify and
finance environmental infrastructure projects to provide a clean and healthy environment for
residents along the U.S.-Mexico border. To date, they have provided nearly $1 billion for 135
environmental infrastructure projects with a total estimated cost of $2.89 billion and allocated
$33.5 million in assistance and $21.6 million in grants for over 450 other border
environmental projects. The Mexican government has also made substantial new investments
in environmental protection, increasing the federal budget for the environmental sector by
81% between 2003 and 2008.
 List some of the basic points regarding NAFTA and its members
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
3.3.3. Long-Term Strategies of NAFTA
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Free-trade agreements should not be thought of as an end in themselves; nor should they be
loaded with unrealistic expectations. Instead, they should be viewed as part of a larger effort
toward substantive bilateral and regional cooperation toward common goals. Migration,
labor, and environmental protection are examples of topics on which deeper cooperation is
sorely needed.
Trade liberalization is facing a crisis of legitimacy among people around the world, from
rural farmers in Latin America to cotton producers in Africa to manufacturing workers in the
United States and Europe. Governments can win back public support for new trade
agreements, but they must change their current tactics. First, they must stop making empty
promises that trade liberalization alone will bring new jobs or clean environments, or stem
the flow of illegal migration. Second, they must enhance long-term development and avoid
unnecessary setbacks by strengthening their domestic economies‘ capacity to respond to
shocks when exposed to the global marketplace. The needs of developing countries must be
taken into account in trade negotiations in meaningful ways that create real opportunities for
development and growth, so that these countries‘ citizens can also become consumers in the
global economy. That, in the long-term, is how everyone will achieve greater prosperity.

 Self-Check Exercise
1. Why NAFTA was established?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
2. Noticeably discuss about the myth and facts of NAFTA?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

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 ___________________________________________________________________________
__________
3. Elaborate the long-term strategies of NAFTA
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

4. What are the central activities of NAFTA?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

Lesson three:
3.4. The Association of South-East Asian Nations/ ASEAN
Lesson Objectives
Dear students, after the successful completion of this session you will be able to:
 Identify the objectives of ASEAN
 Identify the main concerns of ASEAN
 Explain the major purposes of ASEAN
Dear students, this section requires 3 Hours

Brain storming Questions

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___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_____________________

(in New Political Economy · June 2008,, HELEN E. S. NESADURAI)

The Association of Southeast Asian Nations (ASEAN) has been hailed as one of the more
successful regional organizations in the developing world, credited for maintaining regional
peace and stability in Southeast Asia for more than three decades. It is formed in 1967;
ASEAN‘s founding members are Indonesia, Malaysia, the Philippines, Singapore and
Thailand. Brunei joined the grouping in 1984 following its independence from Britain,
Vietnam in 1995, Laos and Burma (Myanmar) in 1997 and Cambodia in 1999, bringing
ASEAN‘s current membership to ten. The fact that ASEAN was established at all is
remarkable given the highly charged relations among its five founding members during the
1960s. Not only were there disputes over inter-state borders, some governments were accused
of aiding secessionist groups in neighboring states.

In addition, Indonesia and the Philippines challenged the legitimacy of the independent state
of Malaysia, with Indonesia under President Sukarno launching a limited guerrilla war
against Malaysia from 1963–5, termed Konfrontasi (Confrontation) to protest Malaysia‘s
formation through the 1963 merger of Malaya, independent since 1957, with the British
colonies of Singapore, Sabah and Sarawak. However, by 1967, these governments had come
to realize that these inter-state conflicts were unproductive and had diverted their attention
from more pressing internal security and political governance problems. Sukarno‘s ouster
from power by General Suharto in a military coup paved the way for the formation of
ASEAN as a regional mechanism to help moderate inter-state relations, thereby freeing up
attention and resources that could now be directed towards building unified nation-states out
of societies deeply divided along ethnic, linguistic, cultural and religious lines.

Although ASEAN‘s initial goals were modest, and confined to moderating regional inter-
state relations, the Association expanded its remit when it chose to get diplomatically

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involved in the Cambodian crisis of the 1980s, following communist Vietnam‘s invasion of
that country in December 1978 and the subsequent installation of a Vietnamese-backed
government. Since the ending of the Cold War and the resolution of the Cambodian crisis,
ASEAN embraced new areas of cooperation on the environment, regional trade liberalization,
a host of non-traditional security problems, including transnational crimes such as drug
trafficking and maritime piracy, as-well-as a variety of social development issues including
poverty and rural development, among others.
However, ASEAN faced considerable public criticism from the mid 1990s when it was
unable to craft effective regional responses to the Trans-boundary pollution coming from
forest fires in Indonesia, the 1997–98 Asian financial crisis and the political repression and
human rights abuses in Burma. Internationally oriented business groups also criticized the
organization for failing to prevent protectionist interests from disrupting the ASEAN Free
Trade Area (AFTA) project. ASEAN‘s ineffectiveness in these different issue areas was
attributed to its outmoded institutional style, centered on mutual respect for the sovereignty
of member states, non-interference in their internal affairs and an aversion to rule-based and
centralized approaches to cooperation.

3.4.1 ASEAN and sovereignty/non-interference: origins and purposes

As already noted, ASEAN was formed to ensure regional peace and stability by helping to
moderate relations between its five founding members, to be achieved over time by
inculcating a shared understanding among its members that each would practice restraint in
its relations with other members. In view of this primary goal, it was not surprising that the
commitment to sovereignty and non-interference became vital norms for the Association.

A decade later, in 1976, these principles were formally articulated in ASEAN‘s first treaty,
the Treaty of Amity and Cooperation in Southeast Asia (TAC), which set out the grouping‘s
core principles for inter-state relations. Aside from the sovereignty/non-interference principle
and the commitment to the peaceful settlement of disputes, inter-state behaviour in ASEAN
is also governed by a set of informal, procedural norms, which emerged through repeated
practice as officials and leaders interacted with each over time. These practices, which
became known as the ‗ASEAN Way‘ of cooperation, include a group preference for informal
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over formal institutions, consensus decision making, and non-confrontational, deliberative
styles of interaction. Centralized institutions were eschewed in favour of inter-governmental
discussions and negotiations, with a small Secretariat established only in 1977.
Member governments have refused to delegate greater authority to the ASEAN Secretariat to
enforce agreements between member states or to monitor domestic policies and events in
order to ward off potential crises. In fact, ASEAN members have openly declared their
aversion to European-style centralized bureaucracies and supranational entities, a long-
standing preference that continues to shape ASEAN‘s style of regional governance.
Sovereignty/non-interference and the ASEAN Way have been central to the success of
ASEAN in averting war and open conflict between its members.

3.4.2 Regional economic Liberalization & integration: AFTA and the AEC
When ASEAN decided in 1992 to form AFTA, a regional free trade area to be completed
over a 15-year period, officials and leaders were not looking to expand intra-regional trade
per se. Rather, they hoped that foreign investors would be attracted to the single,
geographical economic space that they were creating in Southeast Asia. Since the late 1980s,
multinational corporations had begun looking out for integrated, continental-sized markets in
which to locate their production networks and sell their products. By the early 1990s,
officials and leaders had become aware that the formation of the North American Free Trade
Agreement (NAFTA) and the Single European Market could lead to the diversion of FDI
from ASEAN. The further opening up of China in the early 1990s added to these concerns.

ASEAN leaders and officials interpreted these new patterns in global FDI flows in terms of
an impending FDI ‗crisis‘ facing their own economies, reinforced by falling applications for
foreign investment approvals in each of the five original ASEAN members during the early
1990s. Because the FDI ‗crisis‘ was the product of either emerging regionalist schemes
elsewhere or the opening up of a continental-sized economy like China, officials and leaders
were persuaded that regional collaboration to create a similarly large market in Southeast
Asia was the most logical response.

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For the ASEAN states, the possibility of FDI diversion away from the region posed a threat
to national governments because of its capacity to disrupt economic growth. Economic
growth was a central basis of political legitimacy in the ASEAN states and a key instrument
through which governments retained political power and maintained social stability and
political order in domestically divided societies. Economic growth also allowed politically
important domestic distributional goals to be achieved with fewer efficiency and
sociopolitical costs. AFTA was, therefore, adopted to help secure FDI inflows into member
economies. The principal instrument through which a single regional market would be
created was the Common Effective Preferential Tariff (CEPT) scheme. Under CEPT,
member states would progressively reduce tariffs on all manufactured and processed
agricultural products, later extended to include agricultural commodities, until the target 0–5
per cent tariff range was reached and a single, regional market created.

According to article 1 of the charter of the ASEAN, the following are its some Purposes:
1. To maintain and enhance peace, security and stability and further strengthen peace-
oriented values in the region;
2. To enhance regional resilience by promoting greater political, security, economic and
socio-cultural cooperation;
3. To preserve Southeast Asia as a Nuclear Weapon-Free Zone and free of all other weapons
of mass destruction;
4. To ensure that the peoples and Member States of ASEAN live in peace with the world at
large in a just, democratic and harmonious environment;
5. To create a single market and production base which is stable, prosperous, highly
competitive and economically integrated with effective facilitation for trade and investment
in which there is free flow of goods, services and investment; facilitated movement of
business persons, professionals, talents and labour; and freer flow of capital;
6. To alleviate poverty and narrow the development gap within ASEAN through mutual
assistance and cooperation;

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 7. To strengthen democracy, enhance good governance and the rule of law, and to promote
and protect human rights and fundamental freedoms, with due regard to the rights and
responsibilities of the Member States of ASEAN;
8. To respond effectively, in accordance with the principle of comprehensive security, to all
forms of threats, transnational crimes and Trans boundary challenges;
9. To promote sustainable development so as to ensure the protection of the region‘s
environment, the sustainability of its natural resources, the preservation of its cultural
heritage and the high quality of life of its peoples;
10. To develop human resources through closer cooperation in education and life-long
learning, and in science and technology, for the empowerment of the peoples of ASEAN and
for the strengthening of the ASEAN Community;
11. To enhance the well-being and livelihood of the peoples of ASEAN by providing them
with equitable access to opportunities for human development, social welfare and justice;
12. To strengthen cooperation in building a safe, secure and drug-free environment for the
peoples of ASEAN;
13. To promote a people-oriented ASEAN in which all sectors of society are encouraged to
participate in, and benefit from, the process of ASEAN integration and community building;
14. To promote an ASEAN identity through the fostering of greater awareness of the diverse
culture and heritage of the region; and
15. To maintain the centrality and proactive role of ASEAN as the primary driving force in
its relations and cooperation with its external partners in a regional architecture that is open,
transparent and inclusive.
PRINCIPLES (ARTICLE 2 of the charter of ASEAN)
ASEAN and its Member States shall act in accordance with the following Principles:
a) Respect for the independence, sovereignty, equality, territorial integrity and national
identity of all ASEAN Member States;
b) Shared commitment and collective responsibility in enhancing regional peace, security and
prosperity;
c) Renunciation of aggression and of the threat or use of force or other actions in any manner
inconsistent with international law;
d) Reliance on peaceful settlement of disputes;
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 e) Non-interference in the internal affairs of ASEAN Member States;
f) Respect for the right of every Member State to lead its national existence free from
external interference, subversion and coercion;
g) enhanced consultations on matters seriously affecting the common interest of ASEAN;
h) Adherence to the rule of law, good governance, the principles of democracy and
constitutional government;
i) respect for fundamental freedoms, the promotion and protection of human rights, and the
promotion of social justice;
j) Upholding the United Nations Charter and international law, including international
humanitarian law, subscribed to by ASEAN Member States;
k) abstention from participation in any policy or activity, including the use of its territory,
pursued by any ASEAN Member State or non-ASEAN State or any non-State actor, which
threatens the sovereignty, territorial integrity or political and economic stability of ASEAN
Member States;
l) Respect for the different cultures, languages and religions of the peoples of ASEAN, while
emphasizing their common values in the spirit of unity in diversity;
m) the centrality of ASEAN in external political, economic, social and cultural relations
while remaining actively engaged, outward-looking, inclusive and non-discriminatory; and
n) Adherence to multilateral trade rules and ASEAN‘s rules-based regimes for effective
implementation of economic commitments and progressive reduction towards elimination of
all barriers to regional economic integration, in a market-driven economy.
3.4.3 Organs of ASEAN
1) ASEAN SUMMIT
The ASEAN Summit shall comprise the Heads of State or Government of the Member States.
It is to be the supreme policy-making body of ASEAN;
2) ASEAN COORDINATING COUNCIL
The ASEAN Coordinating Council shall comprise the ASEAN Foreign Ministers and meet at
least twice a year.
The ASEAN Coordinating Council shall:
 Prepare the meetings of the ASEAN Summit;

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  Coordinate the implementation of agreements and decisions of the ASEAN Summit;
 The ASEAN Coordinating Council shall be supported by the relevant senior officials.
3) ASEAN Community Councils
4) ASEAN Sectoral Ministerial Bodies
5) Secretary-General of ASEAN and ASEAN Secretariat
6) Committee of Permanent Representatives to ASEAN
7) ASEAN National Secretariats
8) ASEAN Human Rights Body

Lesson four:
3.5. The Middle East and the Arab League
Lesson Objectives:
Dear students, after the successful completion of this session you will be able to:
 Explain about Middle East as one region of the world
 The objectives of Arab League
 Elaborate historical foundation of Arab League
Dear students, this section requires 3 Hours
Brain Storming Question

List some countries under Middle-East and Arab league as well as their relationship

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3.5.1. History of Middle East as One Region of the World

Figure 1: Geographic Stretches and Location of the Middle East

The approximate number of population in the region is about 371 million (2010). Countries
within the region 18 countries cover 7,207,575 km2 or 2,782,860 sq mi area. The three
consecutive largest cities of the region are Cairo, Tehran, and Istanbul.

Mahan, a U.S. naval officer and strategist coined the term ‗Middle East' in 1902, which
referred to the area between Arabia and India, namely the Persian Gulf. He stated that in
order to secure the route to India and to keep Russia in check Great Britain should assume
responsibility for the security of the Gulf area. The geographical boundaries of the 'Middle
East' were not fixed; the term was used as a kind of 'shifting strategic concept' to indicate the
importance of the area and the upcoming challenge between Russia and Britain in Asia. After
the First World War, Britain and France had gained control over Transjordan, Palestine, Iraq,
Syria and Lebanon, and as such the 'Middle East' was expanded to include these territories as
well.

During World War II, Great Britain started to use the 'Middle East' concept to describe the
area covering all Asian and North African lands to the west of India. In the same period, the
U.S. got more involved in the region and followed the British interpretation of the region. For
both countries, the region was not only important for geo-strategic reasons, but also for its

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tremendous reserves of oil. Who actually formed part of the region was of lesser importance.
However, this changed with the increasing number of Jewish settlers in Palestine and the
eventual establishment of the state Israel (1948). Thus, the 'Middle East' was used for
purposes external to the region, without consideration for the interests of the people
concerned. Basically, the security of the 'Middle East' boiled down to defending the 'Middle
East' from any external power which could form a threat to the interests of Britain and the
U.S... During the Cold War, the Anglo-American policy was directed on the prevention of
communism to gain access to the region by keeping the area stable, which implied keeping
bases in the region.

The exogenous policy-contingent origins of the term 'Middle East' render the term highly
contested. After the first Arab-Israeli War, when the Arab forces were defeated, the peoples
of the region started to scrutinize the 'Middle East' concept. Those were the days when Arab
nationalism ran rampant. The Arab vision, which dates back to the 19th Century and which is
primarily rooted in culture and reinforced by history, geography and demography, was
revived. The term 'Arab regional order' was put forward to replace the contested concept of
the 'Middle East'. The argument of Ali Eddin Hellal Dessouki and Jamil Matar was that the
'Middle East' represented a political term instead of referring to a geographical area; that the
term was not derived from the nature of the area or its political, cultural, civilization and
demographic characteristics, because when one uses the term 'Middle', one has to ask 'middle'
in reference to what; plus the term tears up the Arab homeland as a distinct unit since it has
always included non-Arab states. Instead of portraying the region as an ethnic mosaic the
term should underpin the Arab unity. The 'Arab regional order' included all Arab states:
Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania,
Morocco, Oman, Palestine/PLO, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, Yemen
and the United Arab Emirates. The advantage of the term 'Arab regional order' is that it is
generated from the inside; the disadvantage is that there is no consideration for the non-Arab
peoples in the region plus that it ignores the role played by Israel, Iran and Turkey in the
region.

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There are others, however, who emphasize the 'Mediterranean' as an alternative regional
conception. This conception links the South European states to the other Mediterranean
littoral states. Thus, it encompasses two prominent international regions: the geographical
space which borders the northwest sector of the Mediterranean, which is labeled the EU, and
the geographical area covering the south-eastern flank of the basis, which is labeled the
Middle East.

The sub-regions included in the Mediterranean are southern Europe, the Balkans, the
Maghreb, and the Mashreq. The Maghreb is divided into a Mediterranean climate region in
the north, and the arid Sahara in the south. Maghreb is home to 1 percent of the global
population as of 2010. Maghrebi people include Moroccans (along with Sahrawis),
Algerians, Libyans, Mauritanians, and Tunisians. Maghreb is largely composed of Berber and
Arab descent with European and Sub-Saharan elements. Another significant group in the
region is Turks who came over with the expansion of the Ottoman Empire. A large Turkish
descended population exists, particularly in Tunisia and Algeria.

The Mediterranean dimension of the region is not new, but was definitely given a boost after
the Cold War, and especially after the Gulf War in1990-1991. Notwithstanding that the
concept 'Mediterranean' is widely used, the concept remains vague and is predominantly used
to describe the cooperation between European countries and Arab states. This cooperation
ranges from bilateral cooperation agreements under the 'Mediterranean' policy; multilateral
relations with all Arab states via the Euro-Arab dialogue (established in 1973); multilateral
agreements with sub regional organizations in the Middle East (Arab Maghreb Union; Gulf
Cooperation Council; Arab League); to the Conference of Security and Cooperation in the
Mediterranean (CSCM), and the Euro-Mediterranean process established by the EU at the
European Council Meeting in Barcelona in 1995.Whereby the major issues of EU's concern
are: energy security; regional stability; and the Arab-Israeli Peace Processes. The advantage
of a Mediterranean vision lies in the fact that is not contested. True enough, there are not too
many proponents of the idea, but there are not too many opponents either. In any event, it
does not provoke hostility in the Arab region, which was clearly the case with the 'Middle
East' label.

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Europe is, however, not an exception. A similar story can be told about the Middle East.
There is no single agreed definition of the political and geographical boundaries of the
Middle East. For instance, in some parts of Asia the region is referred to as West Asia,
however, this does not include Egypt, the Sudan, and the Maghreb, which are located in
Africa but are generally conceived as countries of the Middle East. During the nineteenth
century the European powers considered the East as the Eurasian region, which started where
the Western civilization ended, namely the African continent and the Ottoman Empire. In
those days, the Eastern Question was the term to describe the great strategic competition
among Britain, France, Russia and Germany for access to and control over this region. And
as the influence of the West expanded further into Asia, a distinction between the Near East
and the Far East was made.

 Question evaluate yourself

Short note about Middle East and Maghreb region:

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3.5.2. The Arab League

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 Figure 2: Geographical Stretches of the Arab League
To identify members‘ expansions of the Arab League, there are lists of states, below, that are
parties to this regional organization in different times. Dear learner, try to identify the
permanent of full members and those that have observer status and ad hoc membership in the
league.

The Charter of the Arab League is the founding treaty of the Arab League. The agreement was
concluded on March 22nd, 1945 by the governments of Syria, Transjordan (Jordan as of 1950), Iraq,
Saudi Arabia, Lebanon, Egypt, and North Yemen (Yemen as of 1990). The Charter endorsed the
principle of an Arab homeland while respecting the sovereignty of the individual member states. The
internal regulations of the Council of the Arab League and the committees were agreed to in October
of 1951 and those of the Secretariat General in May of 1953. The following countries later joined
through means of the Arab League Charter: Libya (1953); Algeria (1962); Mauritania (1973); Sudan
(1956); Bahrain (1971) Somalia (1974); Morocco (1958); Qatar (1971); Palestine (1976); Tunisia
(1958); Oman (1971); Djibouti (1977); Kuwait (1961); United Arab Emirates (1971); Comoros
(1993).
(Charter of the Arab league preamble)
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The British Empire realized the Urge of Unity within Arab States (Pan Arabism) in the early
part of the twentieth century, which helped them secure the cooperation of the Arabs, leading
them to revolt against the Turkish-ruled Ottoman Empire during World War I. The British
promised to help the Arabs establish a united Arab kingdom under Sherif Hussein of Mecca,
which would encompass the Asian part of the Arab World (including the modern day
Arabian Peninsula, Iraq, Syria, Lebanon, Palestine, Israel and Jordan). After winning the war,
however, the British betrayed Sharif Hussein and instead helped divide the region into mini
states, implementing their policy of "Divide and Rule."

The British needed Arab cooperation once more during World War II, and again returned to
play the Pan-Arabism card by encouraging the formation of the League. Many Arab
intellectuals believe that the British did not want the League to act as a step towards Arab
unity, but actually used the League to prevent it. The Egyptian government first proposed the
Arab League in 1943. Egypt and some of the other Arab states wanted closer cooperation
without the loss of self-rule that would result from total union.

After time taking efforts, the Arab League was established. The Arab League, also called
League of the Arab States is a regional organization of Arab States in the Middle East and
North Africa. It was formed in Cairo on March 22, 1945 with six members: Egypt, Iraq,
Transjordan (renamed Jordan after 1946), Lebanon, Saudi Arabia, and Syria. Yemen joined

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as a member on 5 May 1945. It currently has 22 members. Countries that later joined are:
Algeria (1962), Bahrain (1971), Comoros (1993), Djibouti (1977), Kuwait (1961), Libya
(1953), Mauritania (1973), Morocco (1958), Oman (1971), Qatar (1971), Somalia (1974),
Southern Yemen (1967), Sudan (1956), Tunisia (1958), and the United Arab Emirates
(1971). The Palestine Liberation Organization was admitted in 1976. Egypt's membership
was suspended in 1979 after it signed a peace treaty with Israel; the league's headquarters was
moved from Cairo, Egypt, to Tunis, Tunisia. In 1987 Arab leaders decided to renew
diplomatic ties with Egypt. Egypt was readmitted to the league in 1989 and the league's
headquarters was moved back to Cairo.

The original charter of the Arab League created a regional organization of sovereign states
that was neither a union nor a federation. Among the goals the league set for itself were
winning independence for all Arabs still under alien rule, and to prevent the Jewish minority
in Palestine (then governed by the British) from creating a Jewish state. The members
eventually formed a joint defense council, an economic council, and a permanent military
command. The main goal of the League was to: draw closer the relations between member
States and co-ordinate collaboration between them, to safeguard their independence and
sovereignty, and to consider in a general way the affairs and interests of the Arab countries.

The Arab League is involved in political, economic, cultural, and social programs designed to
promote the interests of member states. The Arab League has served as a forum for member
states to coordinate their policy positions and deliberate on matters of common concern,
settling some Arab disputes and limiting conflicts such as the Lebanese civil wars of 1958.
The Arab League has served as a platform for the drafting and conclusion of almost all
landmark documents promoting economic integration among member states, such as the
creation of the Joint Arab Economic Action Charter, which set out the principles for
economic activities of the League. It has played an important role in shaping school curricula,
and preserving manuscripts and Arab cultural heritage. The Arab League has launched
literacy campaigns, and reproduced intellectual works, and translated modern technical
terminology for the use of member states. It encourages measures against crime and drug
abuse and deals with labor issues (particularly among the immigrant Arab workforce). The

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Arab League has also fostered cultural exchanges between member states, encouraged youth
and sports programs, helped to advance the role of women in Arab societies, and promoted
child welfare activities.

Each member has one vote on the League Council, decisions being binding only on those
states that have voted for them. The aims of the League in 1945 were to strengthen and
coordinate the political, cultural, economic, and social programs of its members, and to
mediate disputes among them or between them and third parties. The signing on April 13,
1950, of an agreement on Joint Defense and Economic Cooperation also committed the
signatories to coordination of military defense measures.
Check yourself
Write short note about the geographical location and coverage Middle East.
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Explain the Region of Middle East

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What are the roles of Arab League?
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___________________________________________________________________________
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Historical relationship between Middle East and the Arab League
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Why the Arab league was established?

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Summary
The first and vital concept which is highly related to integration and cooperation is
Globalization. It is explained as a process by which international and regional economies,
societies, and cultures have become integrated through a global network of communication,
transportation, and trade. The term is sometimes used to refer specifically to economic
globalization: the integration of national economies into the international economy through
trade, foreign direct investment, capital flows, migration, and the spread of technology.
However, globalization is usually recognized as being driven by a combination of economic,

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technological, socio-cultural, political, and biological factors. The term can also refer to the
transnational circulation of ideas, languages, or popular culture through acculturation.
Different regional organizations facilitate the integrations in between countries from different
corner of the globe. Such as: European Union, NAFTA, ASEAN, the Middle East and Arab
League.

As we discussed within the first lesson of this chapter, European Union (EU) is consisting of
28 member states that are subject to the obligations and the privileges of the membership.
Every member state is part of the founding treaties of the union and is subjected to binding
laws within the common legislative and judicial institutions. In order for the EU to adopt
policies that concern defence and foreign affairs, all member states must agree unanimously.
In addition, European Union (EU) is a political and economic community of twenty-eight
members. Among them United Kingdom leaving on March 29, 2019 after its citizens voted
pro, such decision on June 2016, states with supranational and inter-governmental features,
located primarily in Europe, established by the Treaty on European Union (the Maastricht
treaty). It was strongly founded on November 1, 1993 in Maastricht, Netherlands.

The other noticeable organization in this regard is North American Free Trade Agreement
(NAFTA). It fuels economic growth and dynamic trade, stimulates investment while creating
productive partnerships, works for small and medium-sized businesses and provides fairness
and certainty. NAFTA partners promote environmental protection, and provide greater job
opportunities in North America.
As far as integration between countries is concerned, it is best to discus about the Association
of Southeast Asian Nations (ASEAN). It is the other organization that tight the relationship
between its members. Subsequently, ASEAN has been hailed as one of the more successful
regional organizations in the developing world, credited for maintaining regional peace and
stability in Southeast Asia for more than three decades. It is formed in 1967; ASEAN‘s
founding members are Indonesia, Malaysia, the Philippines, Singapore and Thailand. Brunei
joined the grouping in 1984 following its independence from Britain, Vietnam in 1995, Laos
and Burma (Myanmar) in 1997 and Cambodia in 1999, bringing ASEAN‘s current

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membership to ten. The fact that ASEAN was established at all is remarkable given the
highly charged relations among its five founding members during the 1960s.

Arab league and Middle East are an additional organization that facilitates the integration and
cooperation. The Arab League is involved in political, economic, cultural, as well as social
programs designed to promote the interests of member states. The Arab League has served as
a forum for member states to coordinate their policy positions and deliberate on matters of
common concern, settling some Arab disputes and limiting conflicts.

The League has served as a platform for the drafting and conclusion of almost all landmark
documents promoting economic integration among member states, such as the creation of the
Joint Arab Economic Action Charter, which set out the principles for economic activities of
the League. It has played an important role in shaping school curricula, and preserving
manuscripts and Arab cultural heritage.

Chapter three self-check Questions

Direction one: Write true if the statement is correct and false if it is
incorrect.
1. European Union is one of African sub-regional organization
2. As we discus from this module, the Arab League is involved in political, economic,
cultural, and social programs designed to promote the interests of member states.
3. The concept of regional integration and regional cooperation are the same
4. One of the criticisms against NAFTA is that it has done nothing to improve the
environment
Direction Two: short answers
6. Comparatively discuss the objectives of EU and NAFTA
7. Write short Essay regarding the relationship between Arab league and Middle East
8. List principles of EU
9. What is the reason for the exit of Britain from European Union?
10. Write clearly the difference between regional and sub-regional organizations
11. Compare and contrast regional integration and regional cooperation.
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 Chapter Four
Regionalism and Integration in Africa
Introduction: Overview of African Regional Integration
Dear students, most of the currently active regional organizations in Africa were formed or
re-established in two waves:
a) The first wave from the mid-1970s to the early 1980s, and
b) The second during the first half of the 1990s.
These waves were clearly influenced by positions adopted and initiatives taken by African
countries as well as by events and developments in the rest of the world. Thus the inspiration
for the first wave was related to the deliberate post-independence pursuit of integration by
African policy makers, but it could also be seen to some extent as a response to the success of
the European Community and its first enlargement in the 1970s when the UK, Denmark and
Ireland joined. The second wave was more focused on revitalizing and expanding the
mandates of existing regional bodies rather than on creating completely new groupings. It
took place around the time when the North American countries created the North American
Free Trade Agreement (NAFTA), and the EU was consolidated with the launching of its
single market and the signing of the Maastricht Treaty. This section will summarize the
mandate and scope of activities of the main regional initiatives in a geographic rather than a
chronological order.

Additionally, regional integration is a recurrent item in the development agenda of African

policymakers. Most countries indeed participate into Regional Economic Communities
(RECs) with the aim to achieve deep forms of integration, as for instance represented by a
currency union. The entire project of African Union has in these RECs its building blocks to
realize continental political and economic institutions, including a common central bank.
The potential benefits of economic integration are widely acknowledged in the literature. But
its costs and potential drawbacks, especially when participating, countries are on average
poor and at significantly different stages of economic development. The desirability of deep
integration in Africa, the way to achieve it and its possible effects are the key themes of an

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increasing body of research. Attention so far has been mostly focused on West Africa, where
the whole process of integration is admittedly more advanced.

Regionalism is now widespread in sub-Saharan Africa (SSA). The most important

momentum for joining regional groupings has been the hope of addressing common
challenges-improving economic policy, reducing poverty, and managing the process of
liberalization-in a collective and coordinated manner. By pooling together fragmented
domestic markets, regional cooperation may encourage economic growth and development
by promoting intra-regional trade and economies of scale. Three East African countries-
Kenya, Tanzania and Uganda-are currently attempting to revive the East African Community
(referred to as EAC). Their hope is that doing well support industrialization and bring on
economic reforms that may eventually spill over into neighboring countries.

The region, Eastern Africa, has seen its economic development, infrastructure and progress in
regional integration insulate since the collapse of the EAC in 1977 because of the following
three main causes.
st
 1 -the above countries are experienced drop in the quality of their domestic policies.
Internal political tension and corruption have led to economic stagnation in Kenya, which
is by far the largest economy in the region. In Tanzania, where wide-ranging reforms are
being implemented, results have been limited by the lingering legacy of its socialist
experiment.
nd
 2 - cross-border tensions have risen in frequency and intensity. Continuing tensions in
the Great Lakes region and the resulting domestic political tensions have affected
Uganda, the most promising reformer in the region. Internal civil trouble and interstate
wars in countries like Sudan, Ethiopia, Uganda, Rwanda, Burundi and the former Zaire
have weakened the potential benefits of regional cooperation.
 Finally, economic hardships have meant poor maintenance of local infrastructure, like
road networks, railway lines, and postal services, thus increasing the cost of regional
communication and production activities. In the interval, South Africa has emerged as a
powerful alternative for many countries. Thanks to the flexibility of regional co-operation
schemes that allow member countries to have multiple memberships, South Africa has

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 become the main trade partner for many countries in the region, even those outside
SADC.
Not unlike the rest of the continent, Eastern Africa requires high output growth, based on
export oriented industries to fight poverty (mostly rural) and unemployment (mostly urban).
It would also bring external and domestic indebtedness to sustainable levels, and raise social
and human capital development. The many obstacles to realizing these goals are what are
giving a new lease on life on the idea of regional integration. The key concern addressed in
this module is whether the chances of fulfilling the goals of regional integration in East
Africa are better now than in the past.
The first concern for this module goes to the history of the EAC since the colonial period to
identify the problems and constraints that led to its break-up in 1977. Then the module goes
to related issues.
Chapter Objectives
Dear students, after the successful completion of this charter you will be able to achieve
the following specific objectives:
 Give an explanation related to historical foundation of integration in Africa
 List the weakness of EAC
 Explain the debate on new African Regionalism
 Discuss the regional integration of Africa
 Enumerate the rational of African integration
 Explain about different sub-regional organizations in Africa
 Explain East Africa‘s Integration, Ethiopian focus.
Dear students, this chapter requires 12 Hours
Brain Storming Question:
Explain with reference to sub-regional groups under East African Regional Integration

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 Lesson five:
4.1. Historical Background on East African Regional Integration
Efforts at regional integration in the Eastern African region have given rise to five sub-
regional groupings.
Lesson Objectives:
Dear students, after the successful completion of this session you will be able:
 Identify the objectives of AU
 Identify the structures of AU
 Explain the reasons for the shift of OAU to AU
 List basic activities of AU
Dear students, this section requires 3 Hours

Brain Storming Question:

Write your preceding information which is related to the historical foundation of the OAU.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
_________________________________________________
4.1.1. Historical Overview of OAU
Dear respectful students, this session more focus on the historical foundation for the
establishment of Organization of African Unity (OAU). In this regard, in 1963, the newly
independent African countries signed the charter of the OAU in Addis Ababa, Ethiopia. This
was a culmination of African efforts to free the continent from the burden of colonialism,
racial prejudice and discrimination and bring the African peoples much closer together. An
understanding of the events that led to the establishment of the OAU is essential, in order to

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understand the reasons why it failed in integrating Africa and achieving the developmental
aspirations for which it was created.
Although African policy makers entertained the idea of continental unity at these early stages
of the OAU, they did not share a common view on how to attain it. This difference in
approach assumed an institutional form when one group met in Casablanca in January 1961.
The Casablanca Group and the other the Monrovia Group met in Monrovia. Despite the fact
that both agreed on the principle of unity and the necessity for African states to act together
as confederates, they differed on how to approach the issue. The Casablanca group suggested
and formed an African Consultative Assembly with every African state represented.
However, the Monrovia group advocated for an African social solidarity and identity
characterized by unified aspirations and actions. These were obviously two different
approaches towards continental unity. In fact, this was one of the factors that hindered the
OAU as it was because of these deep divisions, that the OAU represented a largely negative
agreement.

The issue of economic cooperation and integration dominated the agenda at the first Summit
of African Heads of states in Addis Ababa, in 1963. These were further emphasized at
subsequent meetings with little success. This dialogue lasted until the 1979 summit in
Monrovia when the leaders deeply discussed and reached a decision to form a Common
African Market (CAM). More detailed discussions ensued in 1980 at a Summit in Lagos,
Nigeria, which led to the adoption of the Lagos Plan of Action (LPA). The LPA provided a
more streamlined framework of action towards the achievement of economic integration on
the African continent. African governments committed themselves to promote economic and
social development and the integration of African economies in order to increase self-
sufficiency and favour the endogenous and self-sustained development of the continent. In
June 1991, the constituent instrument of the African Economic Community (AEC) was
adopted at the next summit in Abuja, Nigeria. This was a revised and corrected version of the
Lagos Plan, and it marked the beginning of an era of reform within the OAU structure.

 Explain the idea of differences in between the two groups that hinder the creation
of OAU.

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___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
4.1.2. The African Union (AU)
In 2000, the OAU underwent a transformation to become the African Union (AU). The AU
was established by the Constitutive Act of the African Union, adopted at the 36th ordinary
session of the Assembly of Heads of State and Government of the OAU on 11 July 2000, in
Lome, Togo. The AU was formally inaugurated in Durban, South Africa, on 9 July 2002, and
the Secretariat of the AU is based in Addis Ababa, Ethiopia. By the time the AU was
inaugurated in Durban, all the 53 former OAU member states, except the Democratic
Republic of Congo and Madagascar, had ratified the Constitutive Act and deposited
instruments of ratification with the Secretary General of the OAU. The Democratic Republic
of Congo deposited its instrument of ratification on the day of inauguration itself, and
Madagascar followed suit almost a year later, on 10 June 2003. Recently, Morocco is to be
again a member of AU.

One of the basic questions is why it was the transformation from OAU to AU? A number of
reasons might be identified. By the end of the 1980s, there was a widespread perception that
the OAU was in a serious need of reform. For one thing, the original motivations for the
OAU‘s creation the Pan-Afrcanist ideals of securing independence for African peoples and
utilizing against colonial subjugation no longer sustained the organization following the
period of decolonization that Africa witnessed in the 1960s, 19070s, and into the 1980s. One
goal would have been to focus on securing peace among Africa‘s newly independent states- a
goal that would have been consistent with the OAU‘s function as a Pan-African body
constituted to improve the lives of African peoples.

However, increasingly the OAU came to be criticized for its failure to respond to serious
conflicts between member states. In addition, several Africa‘s leaders in the fight for
independence led their newly liberated nations into totalitarianism, with an ineffectual OAU,
doing little to put an end to this African malaise. It did not help that OAU found itself caught
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between superpower rivalries during the Cold War, that ideological clashes led to debilitation
of the OAU as it failed adequately to respond to civil wars that were fuelled by East/West
interests (such as in Angola and Mozambique), and that development and reform
programmes initiated by the OAU became symbolized by lofty words and promises as the
OAU suffered from underfunding by member states, and an unwieldy Assembly structure, in
which the 53 members inclined towards preserving national interests and sovereignty at the
expense of a true commitment to regional cooperation and finding ‗African solutions for
African problems‘.

4.1.3. Objectives of the African Union

Due to the problems that beset OAU, at the end of the 20th century African leaders chose to
start afresh with the AU. The core objectives of the AU evidence a commitment by African
leaders not only to tackle the key economic and social issues facing the continent, but also to
improve the AU relative to the weaknesses that had come to cripple the OAU. The objectives
of AU as set out in article 3 of the AU‘s Constitutive Act are replicated as follows:
1) Achieve greater unity and solidarity between the African countries and the peoples of
Africa; 2) Defend the sovereignty, territorial integrity and independence of its Member
States;
3) Accelerate the political and socioeconomic integration of the continent; promote and
defend African common positions on issues of interest to the continent and its peoples; d)
Encourage international cooperation, taking due account of the Charter of the United Nations
and the Universal Declaration of Human Rights;
4) Promote peace, security, and stability on the continent;
5) Promote democratic principles and institutions, popular participation and good
governance; 6) Promote and protect human and peoples' rights in accordance with the
African Charter on Human and Peoples' Rights and other relevant human rights instruments;
7) Establish the necessary conditions which enable the continent to play its rightful role in the
global economy and in international negotiations
8) promote sustainable development at the economic, social and cultural levels as well as the
integration of African economies;

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9) Promote cooperation in all fields of human activity to raise the living standards of African
peoples;
10) Coordinate and harmonize the policies between the existing and future Regional
Economic Communities for the gradual attainment of the objectives of the Union;
11) Advance the development of the continent by promoting research in all fields, in
particular in science and technology;
12) Work with relevant international partners in the eradication of preventable diseases and
the promotion of good health on the continent.
The aforementioned 12 objectives are designed to enhance political cooperation and
economic integration amongst African states, and include the promotion of sustainable
development, democratic principles and good governance, social justice, gender equality, and
good health. While these objectives focus on inter-African cooperation, together they point to
a general theme of upgrading Africa‘s position on the international plane so that African
states might play an increased role in the world economy and in global negotiations.
4.1.4. Basic Principles of the African Union
Dear students, as provided under Article 4 of the Constitutive Act of the AU, there are
principles in accordance with which the AU is supposed to function. Comparing with Article
2 of the UN Charter that enumerates the principles of the UN, article 4 of the Constitutive
Act of the AU clearly lays down the principles of the Union. Besides, this provision
incorporates new principles which are not included in the UN Charter. Article 4 of the
Constitutive Act of the African Union is read as:

 Before you are going to the detail, list down the basic principles of AU
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________
The African Union tries to function in accordance with the following core principles:

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 I. Sovereign equality and interdependence among Member States of the Union;
II. Respect of borders existing on achievement of independence;
III. Participation of the African peoples in the activities of the Union;
IV. Establishment of a common defense policy for the African Continent;
V. Peaceful resolution of conflicts among Member States of the Union through such
appropriate means as may be decided upon by the Assembly;
VI. Prohibition of the use of force or the threat to use force among Member States of
the Union;
VII. Non-interference by any Member State in the internal affairs of another;
VIII. The right of the Union to intervene in a Member State pursuant to a decision of
the Assembly in respect of grave circumstances, namely: war crimes, genocide
and crimes against humanity;
IX. Peaceful coexistence of Member States and their right to live in peace and
security;
X. The right of Member States to request intervention from the Union in order to
restore peace and security;
XI. Promotion of self-reliance within the framework of the Union;
XII. Promotion of gender equality;
XIII. Respect for democratic principles, human rights, the rule of law and good
governance;
XIV. Promotion of social justice to ensure balanced economic development;
XV. Respect for the sanctity of human life, condemnation and rejection of impunity
and political assassination, acts of terrorism and subversive activities;
4.1.5. Basic Structures of AU
AU has its structure and under the Constitutive Act of it, various new bodies are established
and the supreme body of the OAU- the Assembly of Heads of State and Government has
been remodeled to become the AU Assembly. The AU Assembly retains supremacy within
the overall structures of the AU and remains composed of heads of state and government or
their duly accredited representatives. The Assembly meets at least once a year in ordinary
session, and may meet more than that in extraordinary session. Its functions include

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determining the common policies of the Union, considering requests for membership of the
Union, monitoring the implementation of policies and decisions of the Union and ensuring
compliance therewith by all member states, and adopting the budget of the Union.
The Executive Council, which is in turn subversion to the Assembly, is composed of
Ministers of Foreign Affairs or other government designates, and is expected to engage in
policy-making in areas of common interest to the member states across a broad range of
disciplines such as foreign trade, energy, industry and mineral resources, water resources and
irrigation, transport and communications, education and social security.
In order to provide technical assistance to the Executive Council in its policy-decision
making, a number of Specialized Technical Committees are established by the Act, such as
Committees on rural economy and agriculture, monetary and financial affairs, trade, customs
and immigration matters, industry, science, technology, energy, natural resources and
environment, and on health, labor and social affairs.

Subsequently, other bodies include a Pan-African Parliament which, by article 17, is intended
to ensure the full participation of African peoples in the development and economic
integration of the continent. On 18 March 2004, the Pan-African Parliament was inaugurated.
It sits at Gallagher Estate, Midrand, in the Gauteng province of South Africa. The
Parliament‘s powers are laid out in a Protocol to the Act, and it is modeled on the European
Union‘s Parliament, which plays a central role in ensuring the democratic nature of the EU.
Like its European counterpart, the Pan-African has as one of its objectives the promotion of
the principles of human rights and democracy, and is required to encourage good governance,
transparency and accountability in member states. The parliament is composed of five
representatives from each state which should include at least one woman in their delegations
and must reflect the diversity of political opinions in each National Parliament or other
deliberative organ. In the first five years, the parliament has consultative and advisory powers
only, but thereafter it will have legislative powers.

While the Pan-African Parliament is envisaged as something akin to a legislature for Africa,
the African Court of Justice will act as the regional adjudicator, staffed by judges whose
charge under article 26 is that they be seized with matters of interpretation arising from the

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application or implementation of [the Constitutive Act of the Union]. The Court is yet to be
created, not least because of problems with funding; and there remains some debate about the
relationship of the African Court of Justice with the African Court on Human and Peoples‘
Rights.
Another notable body of the new AU is its peace and Security Council, which is modeled on
the UN Security Council. It has been tasked with taking decisions on conflict prevention,
management and resolution, and is described as a collective security and early warning
arrangement to facilitate timely and efficient response to conflict and crisis situations in
Africa. To this end, the Council may authorize peace missions, and recommend to the
Assembly that the AU intervene in certain situations where grave crimes (such as crimes
against humanity, war crimes and genocide) are being perpetrated. The establishment of the
peace and Security Council of the AU thus provide clearly defined mechanism for
determining situations representing a serious threat to legitimate order and the steps
necessary to restore peace and stability to member states, in close cooperation with the UN
Security Council.
So that its aims might be achieved, an African Standby Force has been created for
deployment on the instructions of the Peace and Security Council, a Continental Early
Warning System has been set in place in order to facilitate the anticipation and prevention of
conflicts, and a Panel of the Wise (made up of five highly respected African personalities
from various segments of the society who have made outstanding contribution to the cause of
peace, security and development on the continent) has been constituted to advise the Peace
and Security Council on all issues pertaining to the promotion, and maintenance of peace,
security and stability in Africa. Aside from its emergency powers, the Council has a general
mandate to develop a common defense policy and promote and encourage democratic
practices, good governance and the rule of law, protect human rights and fundamental
freedoms, respect for the sanctity of human life and international humanitarian law, as part of
the efforts for preventing conflicts.
The Council is composed of 15 states reflecting the geographical regions of the continent and
which, notably, are to be committed to principles of democratic governance, the rule of law
and human rights as a requirement for membership of the Council. The Council generally

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takes its decisions by consensus, but where the consensus cannot be reached, then, on matters
of substance, the Council adopts its decision by a two-thirds majority vote.

In addition to the creation, by article 19, of three Pan-African financial institutions- the
African Central Bank- the last body worth mentioning is the Economic, Social and Cultural
Council. It is described as being an advisory organ composed of different social and
professional groups of the Member States of the Union, and is composed of 150 civil society
organizations covering such diverse interests as those of women, children, the elderly, the
disabled, professional groups, NGOs, workers, employees, traditional leaders, academics, and
religious and cultural organizations. With the advice and encouragement of these diverse
interest groups, the Council will aim to fulfill its function of promoting human rights, the rule
of law, good governance and gender equality.

Self-check Exercise:
The reason for the establishment of OAU:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
List some of the major roles of AU:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

Explain the reason why OAU changed into AU?

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___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

Is AU limited only to the affairs of peace and security?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________
4.3. Sub-Regional Organizations
Lesson six:
4.3.1. Common Market for Eastern and Southern Africa (COMESA)
Lesson Objectives:
Dear students, after the successful completion of this session you will be able to:
 Identify the role of COMESA
 Identify the primary objectives of COMESA
 List down the major institutions of COMESA
Dear students, this section requires 3 Hours
Brain Storming Questions
Discuss the major activities of COMESA
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
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___________________________________________________________________________
__________
4.3.1.1. The Historical Background of COMESA
The genesis history of this organization goes back to COMESA mid 1960s. The idea of
regional economic co-operation received considerable impetus from the buoyant and
optimistic mood that characterized the post-independence period in most of Africa. The mood
then was one of pan-African solidarity and collective self-reliance born of a shared destiny. It
was under these circumstances that, in 1965, the United Nations Economic Commission for
Africa (ECA) convened a ministerial meeting of the then newly independent states of Eastern
and Southern Africa to consider proposals for the establishment of a mechanism for the
promotion of sub-regional economic integration. The meeting, which was held in Lusaka,
Zambia, recommended the creation of an Economic Community of Eastern and Central
African states.

An Interim Council of Ministers, assisted by an Interim Economic Committee of officials,

was subsequently set up to negotiate the treaty and initiate programmes on economic
cooperation, pending the completion of negotiations on the treaty.

In 1978, at a meeting of Ministers of Trade, Finance and Planning in Lusaka, the creation of a
sub-regional economic community was recommended, beginning with a sub-regional
preferential trade area, which would be gradually upgraded over a ten-year period to a
common market until the community had been established. To this end, the meeting adopted
the "Lusaka Declaration of Intent and Commitment to the Establishment of a Preferential
Trade Area for Eastern and Southern Africa" (PTA) and created an Inter-governmental
Negotiating Team on the Treaty for the establishment of the PTA. The meeting also agreed
on an indicative time-table for the work of the Intergovernmental Negotiating Team.

After the preparatory work had been completed a meeting of Heads of State and Government
was convened in Lusaka on 21st December 1981 at which the Treaty establishing the PTA
was signed. The Treaty came into force on 30th September 1982 after it had been ratified by
more than seven signatory states as provided for in Article 50 of the Treaty

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PTA was established to take advantage of a larger market size, to share the region's common
heritage and destiny and to allow greater social and economic co-operation, with the ultimate
objective being to create an economic community. The PTA Treaty envisaged its
transformation into a Common Market and, in conformity with this, the Treaty establishing
the Common Market for Eastern and Southern Africa, COMESA, was signed on 5th
November 1993 in Kampala, Uganda and was ratified a year later in Lilongwe, Malawi on
8th December 1994.

4.3.1.2. Priorities and Objectives

COMESA (as defined by its Treaty) was established 'as an organization of free independent
sovereign states which have agreed to co-operate in developing their natural and human
resources for the good of all their people' and as such it has a wide-ranging series of
objectives which necessarily include in its priorities the promotion of peace and security in
the region. However, due to COMESA's economic history and background its main focus is
on the formation of a large economic and trading unit that is capable of overcoming some of
the barriers that are faced by individual states.

COMESA's current strategy can thus be summed up in the phrase 'economic prosperity
through regional integration'. With its 21 member states, population of over 385 million and
annual import bill of around US$32 billion COMESA forms a major market place for both
internal and external trading. Its area is impressive on the map of the African Continent and
its achievements to date have been significant.

The COMESA states, in implementing a free trade area, are well on their way to achieving
their target of removing all internal trade tariffs and barriers. Within 4 years after that
COMESA will have introduced a common external tariff structure to deal with all third party
trade and will have considerably simplified all procedures. Other objectives which will be
met to assist in the achievement of trade promotion include: Trade liberalization and Customs
co-operation, including the introduction of a unified computerized Customs network across
the region; improving the administration of transport and communications to ease the
movement of goods services and people between the countries.
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  Discuss COMESA’s achievement to create free trade area among members
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

4.3.1.3. Major Institutions of COMESA

Several institutions have been created to promote sub-regional co-operation and

development. Some of these are:

 The COMESA Trade and Development Bank in Nairobi, Kenya

 The COMESA Clearing House in Harare, Zimbabwe
 The COMESA Association of Commercial Banks in Harare, Zimbabwe
 The COMESA Leather Institute in Ethiopia
 The COMESA Re-Insurance Company (ZEP-RE) in Nairobi, Kenya
In addition a Court of Justice was also established under the COMESA Treaty and became
formally operational in1998. Further initiatives exist to promote cross border initiatives, form
a common industrial policy and introduce a monetary harmonization programme.
COMESA has evolved a comprehensive decision making structure at the top which are the
Heads of State of the 21 member countries. There is then a Council of Ministers responsible
for policy making, 12 technical committees and a series of other advisory bodies (including
specific relations with partner countries and the business community). In addition, each
member state appoints liaison persons in their appropriate ministries who form part of the
day-to-day communication process. Overall co-ordination is achieved through the Secretariat,
based in Lusaka, Zambia, who will be happy to deal with all initial communication.

Check yourself

 Basic objectives of COMESA

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___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
 List down the major institutions/organs of COMESA
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
 Explain the basic activities of COMESA
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

Lesson seven:
4.3.2. Southern African Development Community (SADC)
Lesson Objective
Dear students, after the successful completion of this session you will be able to:
 Explain the historical background of SADC
 Identify the major role of SADC
 Identify sub-institutions/units of SADC
Dear students, this section requires 1:30 Hour

Brain Storming Question

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Do you think that SADC is limited only to the affairs of development?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

4.3.2.1 Historical Background of SADC

The Southern African Development Co-ordination Conference, SADCC, the forerunner of
the SADC, the Community, was established in April 1980 by Governments of the nine
Southern African countries of Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland,
Tanzania, Zambia and Zimbabwe.
The formation of SADC was the culmination of a long process of consultations by the leaders
of Southern Africa. Towards the end of the 1970's, it became clear to the leaders of the region
that just having a national flag and a national anthem would not meet the needs of the people
for improved living standards.
Secondly, the positive experiences gained in working together in the group of Frontline
States, to advance the political struggle, had to be translated into broader co-operation in
pursuit of economic and social development. From 1977, active consultations were
undertaken by representatives of the Frontline States, culminating in a meeting of Foreign
Ministers of the Frontline States in Gaborone, in May 1979, which called for a meeting of
ministers responsible for economic development. That meeting was subsequently convened
in Arusha, Tanzania, in July 1979. The Arusha meeting led to the birth of the Southern
African Development Coordination Conference (SADCC) a year later in 1980.
The transformation of the organization from a Coordinating Conference into a Development
Community (SADC) took place on August 17, 1992 in Windhoek, Namibia when the
Declaration and Treaty was signed at the Summit of Heads of State and Government thereby
giving the organization a legal character.

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The Member States are Angola, Botswana, the Democratic Republic of Congo, Lesotho,
Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, and
United Republic of Tanzania, Zambia and Zimbabwe. SADC headquarters are located in
Gaborone, Botswana.
4.3.2.2 Objectives of Southern African Development Community
The following points are the major objectives of SADC. These are:
1) Achieve development and economic growth, alleviate poverty, enhance the standard and
quality of life of the people of Southern Africa and support the socially disadvantaged
through regional integration;
2) Evolve common political values, systems and institutions;
3) Promote and defend peace and security;
4) Promote self-sustaining development on the basis of collective self-reliance, and the
interdependence of Member States;
5) Achieve complementarities between national and regional strategies and programmers‘;
6) Promote and maximize productive employment and utilization of resources of the Region;
7) Achieve sustainable utilization of natural resources and effective protection of the
environment;
8) Strengthen and consolidate the long standing historical, social and cultural affinities and
links among the people of the Region.
The ultimate objective of SADC, the Community is, therefore, to build a region in which
there will be a high degree of harmonization and rationalization to enable the pooling of
resources to achieve collective self reliance in order to improve the living standards of the
people of the region.
4.3.2.3. Other Sub-Institutions of SADC
The principal institutions of SADC following the adoption by the extra-Ordinary Summit of
the Report on the Restructuring of SADC Institutions are as follows:
 Summit: made up of Heads of State and/or Government, the Summit is the ultimate
policy-making institution of SADC. It is responsible for the overall policy direction and
control of functions of the Community. The Summit usually meets once a year around
August/September in a member State at which a new Chairperson and Deputy are elected.

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 Under the new structure, it is recommended that the Summit meets twice a year. More
functions of the Summit are enumerated under Article 10 of the SADC Treaty.
 The Troika: the Extra-Ordinary Summit decided to formalize the practice of a Troika
system consisting of the Chair, Incoming Chair and the Outgoing Chair of SADC which
has been effective since it was established by Summit at its meeting in Maputo,
Mozambique in August 1999. Other member States may be co-opted into the Troika as
and when necessary. This system has enabled the Organization to execute tasks and
implement decisions expeditiously as well as provide policy direction to SADC
Institutions in the period between regular SADC meetings.
 Organ on politics, defense, and security: the Extra-Ordinary Summit adopted
the Report of the Ministerial Committee on Foreign Affairs, Defense and Security which
met on November 23, 2000 in Harare, Zimbabwe and addressed the following issues,
pertaining to the Organ, in particular that:
The Organ should be coordinated at the level of Summit on a Troika basis and reporting to
the Chairperson of SADC. The Chairperson of the Organ shall be on a rotation basis for a
period of one year. The Member State holding the Chairpersonship of the Organ shall provide
the Secretariat services. The Chairperson of the Organ shall not simultaneously hold the
Chair of the Summit. The structure, operations and functions of the Organ shall be regulated
by the Protocol on Politics, Defense and Security Cooperation which shall be submitted to
Summit in Blantyre in August 2001 for approval and signature.
 Council of Ministers: the functions of the Council should remain as provided for
under Article 11 of the Treaty. The Council of Ministers consists of Ministers from each
Member State, usually from the Ministries of Foreign Affairs and Economic Planning or
Finance. The Council is responsible for overseeing the functioning and development of
SADC and ensuring that policies are properly implemented. The Council usually meets
twice a year in January and just before the summit in August or September. Under the
new structure it is recommended that the Council should meet four times a year.
 Integrated Committee of Ministers: this is a new institution aimed at ensuring
proper policy guidance, coordination and harmonization of cross-sectoral activities.

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 Tribunal: The Treaty also makes provision for a yet to be established Tribunal. A
protocol to establish the Tribunal was signed in Windhoek, Namibia during the 2000
Ordinary Summit. Once established, the Tribunal will ensure adherence to, and proper
interpretation of the provisions of the SADC Treaty and subsidiary instruments, and to
adjudicate upon disputes, referred to it.
 SADC National Committee: These Committees shall be composed of key
stakeholders notably government, private sector and civil society in member States. Their
main functions will be to provide inputs at the national level in the formulation of
regional policies, strategies, as well as coordinate and oversee the implementation of the
these programmers‘ at the national level. The Committees shall also be responsible for
the initiation of projects and issue papers as an input to the preparation of the Regional
Indicative Development Plan.
 Standing Committee of Senior Officials: the functions of this Committee shall
remain as provided for under Article 13 of the Treaty. The Standing Committee of
Officials consists of one Permanent/Principal Secretary or an official of equivalent rank
from each Member State, preferably from a ministry responsible for economic planning
or finance. This Committee is a technical advisory committee to the Council. The
Chairperson and Vice-Chairperson of the Standing Committee shall be appointed from
the member States holding the Chairpersonship and Vice-Chairpersonship, respectively,
of the Council.
 Secretariat: this is the principal executive institution of SADC responsible for strategic
planning, co-ordination and management of SADC programmers‘. It is headed by an
Executive Secretary and has its head quarters in Gaborone, Botswana. The Extra-
Ordinary Summit agreed that the Secretariat should be strengthened in terms of both its
mandate and the provision of adequate resources for it to be able to perform its functions
effectively as provided for under Article 14 of the Treaty and consistent with the Abuja
Treaty.

Check yourself
 Write the major objectives of SADC
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___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
 List down basic sub-units of SADC
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

 List down basic roles of SADC

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
______________________________________________________________________.
4.3.3. Economic Community of West African States (ECOWAS)
Dear students, after the successful completion of this session you will be able achieve the
following specific objectives:

 Explain the historical background of ECOWAS

 List major objectives of ECOWAS
 Explain the major structures of ECOWAS
Dear students, this section requires 1:30 Hour

Brain Storming Question:

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Do you think that ECOWAS is limited only to the affairs of economy?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

4.3.3.1. History and Background of ECOWAS

The idea for a West African community goes back to President William Tubman of Liberia,
who made the call in 1964. A subsequent agreement was signed between Côte d'Ivoire,
Guinea, Liberia and Sierra Leone in February 1965, but this came to nothing. In April 1972,
General Gowon of Nigeria and General Eyadema of Togo re-launched the idea, drew up
proposals and toured 12 countries, soliciting their plan from July to August 1973. A meeting
was then called at Lomé from 10-15 December 1973, which studied a draft treaty. This was
further examined at a meeting of experts and jurists in Accra in January 1974 and by a
ministerial meeting in Monrovia in January 1975. Finally, 15 West African countries signed
the treaty for an Economic Community of West African States (Treaty of Lagos) on 28 May
1975. The protocols launching ECOWAS were signed in Lomé, Togo on 5 November 1976.
In July 1993, a revised ECOWAS treaty designed to accelerate economic integration and to
increase political co-operation, was signed. Members of ECOWAS are: Benin, Burkina Faso,
Cape Verde, Côte d'Ivoire, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger,
Nigeria, Senegal, Sierra Leone and Togo.

4.3.3.2. The Major Objectives of ECOWAS

ECOWAS aims to promote co-operation and integration in economic, social and cultural
activities, ultimately leading to the establishment of an economic and monetary union
through the total integration of the national economies of member states. It also aims to raise
the living standards of its peoples, maintain and enhance economic stability, foster relations

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among member states and contribute to the progress and development of the African
Continent.

The revised treaty of 1993, which was to extend economic and political co-operation among
member states, designates the achievement of a common market and a single currency as
economic objectives, while in the political sphere it provides for a West African parliament,
an economic and social council and an ECOWAS court of justice to replace the existing
Tribunal and enforce Community decisions. The treaty also formally assigned the
Community with the responsibility of preventing and settling regional conflicts.
4.3.3.3. Structures of ECOWAS
The Community consists of the Authority of Heads of State and Government, the Council of
Ministers, the Mechanism for Conflict Prevention, Management and Resolution, Peace and
Security, the Community Tribunal, the ECOWAS Parliament, the Executive Secretariat and
six Specialized Technical Commissions. The ECOWAS Treaty also makes provision for an
Economic and Social Council (ECOSOC), with an advisory role, to be composed of
representatives of the ―various categories of economic and social activity‖. This body has not
yet been established.
The Authority of Heads of State and Government of Member States are the supreme
institution of the Community and it is composed of Heads of State and/or Government of
Member States. The Authority is responsible for the general direction and control of the
Community and takes all measures to ensure its progressive development and the realization
of its objectives. The Authority meets at least once a year in an ordinary session. An
extraordinary session may be convened by the Chairman of the Authority or at the request of
a Member State provided that such a request is supported by a simple majority of the
Member States. The office of the Chairman is held every year by a Member State elected by
the Authority.
The Council comprises the Minister in charge of ECOWAS Affairs and any other Minister of
each Member State. The Council is responsible for the functioning and development of the
Community. The Council meets at least twice a year in ordinary session. One of such
sessions immediately proceeds the ordinary session of the Authority. An extraordinary
session may be convened by the Chairman of the Council or at the request of a Member State
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provided that such request is supported by a simple majority of the Member States. The
office of Chairman of the Council is held by the Minister responsible for ECOWAS Affairs
of the Member State elected as Chairman of the Authority.

The treaty also provides for a Community Tribunal, whose composition and competence are
determined by the Conference of Heads of State and Government. The Tribunal interprets the
provisions of the treaty and settles disputes between member states that are referred to it. The
Executive Secretariat is responsible for the smooth functioning of the Community and for the
implementation of the decisions of the Authority. The Secretariat's headquarters are based in
Abuja, Nigeria. The Executive Secretary is elected for a four-year term.

In addition to the aforementioned institutions, the following Technical Commissions are

established within the Economic Community of West African States: Food and Agriculture;
Industry, Science and Technology and Energy; Environment and Natural Resources;
Transport, Communications and Tourism; Trade, Customs, Taxation, Statistics, Money and
Payments Political, Judicial and Legal Affairs, Regional Security and Immigration; Human
Resources, Information, Social and Cultural Affairs; and Administration and Finance
Commission. The Authority may, whenever it deems appropriate, restructure the existing
Commissions or establish new Commissions. Each commission shall comprise
representatives of each Member State. Each Commission may, as it deems necessary, set up
subsidiary commissions to assist it in carrying out its work. It shall determine the
composition of any such subsidiary commission.
In October 1999, ECOWAS decided to establish a Court of Justice following a two-day
meeting of Justice Ministers in Abuja. The court will address complaints from member states
and institutions of ECOWAS, as well as issues relating to defaulting nations. The court has a
president, chief registrar and seven judges and is a permanent institution.
The other important organ of the ECOWAS is the ECOWAS Parliament. The ECOWAS
Parliament convened in May 2002, with 115 individuals representing all the member states
except Côte d'Ivoire. Togo, Liberia, Cape Verde, Guinea Conakry, Guinea Bissau, Republic
of Benin, the Gambia and Sierra Leone have 5 Parliamentarians each; Burkina Faso, Mali,
Niger and Senegal have 6 Parliamentarians each; Côte d'Ivoire is entitled to 7 representatives;

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Ghana has 8 and Nigeria has 35. Membership is constituted from the membership of the
national parliaments of each member state. Should the member lose his or her seat in the
national parliament, they would lose their seats in the regional parliament. The ECOWAS
Parliament is situated in Abuja, Nigeria and at present only acts in a consultative and
advisory capacity. Currently, commentators have proposed the Parliament to acquire
legislative powers in the future, as well as to institute directly elected representatives.

 Check yourself with the following questions.

List down the basic objectives of ECOWAS
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
Explain the structures of ECOWAS
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________

Write short note about the history of ECOWAS

________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
_______________________________________________________________
4.4. Challenges of Regionalism and Integration in Africa
4.5.1 Challenge of African Integration Session Objective
-The Political challenges
-The Economic challenges
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a. The Lack of Economic Convergence
In this globalized world the African economies are very vulnerable to external
macroeconomic shocks from neighboring countries, the so-called spillover effects. The
severity of this vulnerability became clear in Eastern Africa during the 1980s, when the
uncoordinated adoption of trade-opening policies and the floating of currencies exposed them
to the vagaries of the world business cycle. The restoration of the macroeconomic stability
attracted capital flows (especially to Kenya and Uganda) and led to an appreciation of their
currencies. The Kenyan authorities chose to stabilize the nominal exchange rate with a high
interest rate. This has discouraged investment in what is the largest economy in the region.
The move has greatly diminished Kenya‘s natural role as an economic locomotive for the
region and has encouraged Kenyan investors to move to Uganda. But groups of countries will
only move to higher levels of integration once they have achieved some degree of
macroeconomic convergence (Jenkins and Thomas, 1997).
The pursuit of policies geared towards promoting a stable macroeconomic environment is a
qualifying condition for membership. Credible sanctions must punish errant member states if
the project is to succeed. In the EAC‘s case, indicators such as GDP, inflation and fiscal
deficits do not show significant convergence. The European Union‘s Maastricht criteria offer
a useful comparison. Critics point to the high cost of reducing inflation at single digit level in
terms of national growth. In 1999, members reached an agreement to read budget proposals
on the same day in order to create more harmony in policies. However, in the June 2000
budget, simultaneity of delivery did not translate into policy convergence. Tanzania and
Uganda decided to raise taxes on fuel in an effort to reduce reliance on international trade
taxes, while Kenya reduced excise duty on beer and imposed an across-the-board VAT,
which also bears on imports.

b. The Lack of Political Convergence

Regionalism can serve as a form of pre-commitment to a set of domestic liberalization
measures. But the ―lock in‖ mechanism will only function to avoid slippage or reversals
when the rules governing a regional scheme are stable and certain. One of the EAC‘s
weaknesses is its vulnerability in the face of a political change. The Eastern African countries
are fragile democracies, with weak institutions subject to political control. Under these
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circumstances, what happens once a government is removed after elections is uncertain. Most
of the reforms implemented so far have been driven by the desire or the obligation-to please
donors and may not be sustainable. Kenya proves that governments that reform under the
sword of conditionality are likely to lose their enthusiasm once external funds dry up. A way
to minimize these fears would be to transfer powers to supra-national bodies. But this
assumes that countries are willing to give up their sovereignty. Short of this solution, a clear
prioritization of the different goals would increase the chances of success of regional
integration.

Unfortunately, the 1999 EAC Treaty simply lists several areas of co-operation instead of
identifying a few key starting points. The problem with multiple objectives is that none of
them tend to be streamlined well enough for benefits to be tangible in the short run. A clear
strategy, setting lowering tariffs and non-tariff barriers as the first and overriding objective,
would have helped in breaking the negotiating impasse described above and avoiding the
signs of fatigue that were due to emerge. This kind of progression would strengthen the
integration process. Carrying on this momentum, new actors in society may become
interested in the issues at stake and new members could show interest. Overlapping
membership is a further challenge for the future of EAC, since it dissipates energies and
resources in activities that could be effectively managed less than one organization.

Furthermore, members who are impatient to reap the benefits of regional integration, or who
are faced with difficult decisions, have the option of choosing an easy exit strategy if they
enjoy membership in different organizations. Kenya and Uganda are members of IGAD and
COMESA, from which Tanzania exited in 1999. Tanzania is a member of SADC, which
Uganda may also be invited to join. While the objectives may be similar, these regional
integration groups choose conflicting routes to achieve them. COMESA, for example, has a
timetable for tariff reduction, which may not be similar to that which EAC members will
have to fix. Deciding on the rules of origin and the list of exceptions have also been thorny
issues in COMESA and different criteria may be decided in the EACI region.

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A further obstacle is the pessimistic view of what can be gained from joining the global
economy. Some analysts are fearful of what lowering tariffs and opening up the country will
do to national economies. What industrial activity there was behind high tariffs has basically
disappeared. Car knocked-down kits (CKDs) used to be imported to be assembled in the
region. This is no longer the case. Similarly, the textile and food industries went through a
period of deindustrialization in the 1990s. In order to allay these fears, the Treaty called for
input from the private sector and civil society by establishing the East African Business Co-
operation Council. A parallel concern is to create a regional identity. The East African Travel
Document, though still not operational, was introduced in March 1997, but no steps have
been taken on free movement of labor within the region. A public relations and marketing
plan has been developed to create a sense of identity among the citizens of Kenya, Uganda
and Tanzania and build trust and goodwill within the partnership.

c. Poor Trading System

Dear students, as well poor trading system is the supplementary challenge of regional
integration. It is all about how to promote inter-and-intra regional trade in Africa. A number
of factors have contributed to the poor (inter/intra) African trade performance.
Firstly, most countries in the region basically produce raw materials, which are less
competitive in the international markets. Sometimes they are raw materials for which there
―is virtually no demand elsewhere in Africa.
Secondly, many African countries have not diversified their products hence few commodities
often make up the bulk of their exports. For instance, petroleum and petroleum products
account for more than 90% of Angola‘s export to other countries in Africa. Likewise, fresh
fish constitutes nearly 98% of such exports for the Seychelles.
Thirdly, many African countries are still ―grapping to undo a legacy dominated by trade with
their former colonial rulers rather than with each other. For example, Senegal is Gambia‘s
neighbor; trade between the two is negligible. France is Senegal‘s biggest trading partner,
while the Gambia trades largely with the United Kingdom (UK). Furthermore, because of
these hindrances to trade within Africa, exports from Tunisia and Cameroon often find their
way to French warehouses before being redirected to each other‘s market shelves.

d. Poor Infrastructure
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Furthermore, the other challenge that affects to promote regional interaction in Africa is poor
infrastructure. As we know, if it is inefficient or inadequate, particularly transport and
communications on the continent. Transportation of goods is very costly, for example, the
freight costs for imports to ―landlocked African countries are more than twice as high as in
Asia. Furthermore, it is not incidental to note that travelling from one African country to
another by air is more difficult and in some cases, this has meant that one has to travel via
Geneva or Paris. The problem is even intensified in relation to visa acquisition formalities.
For example, African entrepreneurs frequently need to wait 6 – 8 weeks to get visas to visit
other African countries while citizens of the UK or France can travel to many African
countries and obtain visa on arrival.

Similarly, Africa is lagging behind in the area of communications. Statistically, Africa has
the lowest telephone density in the world yet the highest telephone charges, and three times
the rate of faults per line as in other developing regions. In its report, the World Bank noted,
for every 100 people in Africa, there are 1.2 telephone lines the lowest rate in the world.
Telephone calls between African countries can be 50 – 100 times more expensive than they
are within North America. The next challenge stems from the fact that regional integration
efforts have not been very successful in Africa. This is because a compensation mechanism
has not been designed to leverage the gains and drawbacks that are ―unavoidably and
unequally distributed between member countries. A significant drawback to successful
regional integration on the continent has been the ―great diversity in African countries‘ sizes,
national resources, level of development and connections to global markets. For example,
tiny Benin does not have ―the same economic interests as its giant oil-rich neighbor, Nigeria,
and also South Africa and Malawi do not experience the costs and benefits of regional trade
arrangements in the same way.

Self-check question

Discuss political and economic challenges of regional integration in Africa.

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Lesson Eight:
4.5. Ethiopia and Eastern Africa Integration
Lesson Objectives:
Dear students, after the successful completion of this session you will be able to::
 Narrate the historical development of IGAD
 examine the role of Ethiopian in IGAD regional integration
 understand the priorities of IGAD region
 Discuss the aims of eastern African regional integration
Dear students, this lesson requires 3 hours

 Discuss intend of eastern African regional integration.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________
One of the hostile regions in the world is Eastern part of Africa. This region holds the
negative distinction of hosting a significant share of the world‘s conflict. Most of these
violent conflicts continue within the IGAD sub-region where all member states are affected.
All member countries are in the least developed category and their efforts to break out of the
circle continues to be frustrated by ongoing conflicts in many ways. The fragile eco-system in
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large parts of the sub-region remains vulnerable to adverse weather changes and increasing
degradation of natural resources. This aggravates the scarcity of the means of the livelihoods
of the nomadic population among which competition for resources is cause for conflict.

As in all Regional Economic Communities in the continent, IGAD is charged with the dual
responsibilities of promoting peace and development among the member countries. It strives
to make headways in peace making and peace building activities to foster peace and stability
in member countries. It is also engaged in conflict monitoring and prevention through
institution building and implementation of conflict early warning programmes as part of its
strategy to meet the objective of peace and stability in the sub-region.

The present plan to develop the IGAD Peace and Security strategy informed by work on
relevant thematic areas is a further step in consistent engagement with the priority of the sub-
region. The intention to incorporate the promotion of cross-border cooperation among
member states is not only a step towards the fulfillment of its development mandate but also
a reinforcement of its peace and stability priority focus. Cross-border cooperation
experiences in regions where it has been pursued as a tool indicates its contributions towards
promoting peace and security, regional integration and local development.

 Write short note on

the role of Ethiopia in IGAD
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
____________.

4.5.1. Intergovernmental Authority for Development (IGAD)

Overview

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The Intergovernmental Authority on Drought and Development (IGADD) was formed in
1986 with a very narrow mandate around the issues of drought and desertification. Since
then, and especially in the 1990s, IGADD became a vehicle for regional security and political
dialogue. The founding members of IGADD decided in the mid-1990s to revitalize the
organization into a full-fledged regional political, economic, development, trade and security
entity similar to SADC and ECOWAS. It was envisaged that the new IGADD would form
the northern sector of COMESA with SADC representing the southern sector.
One of the principal motivations for the revitalization of IGADD was the existence of many
organizational and structural problems that made the implementation of its goals and
principles ineffective. The IGADD Heads of State and Government met on 18 April 1995 at
an Extraordinary Summit in Addis Ababa and resolved to revitalize the Authority and expand
its areas of regional co-operation.
On 21 March 1996, the Heads of State and Government at the Second Extraordinary Summit
in Nairobi approved and adopted an Agreement Establishing the Intergovernmental Authority
on Development (IGAD). In April 1996 on the recommendation of the Summit of the Heads
of State and Government, the IGAD Council of Ministers identified three priority areas of
cooperation:
 Conflict Prevention, Management and Resolution and Humanitarian Affairs;
 Infrastructure Development (Transport and Communications);
 Food Security and Environment Protection.
IGAD has been designated as one of the pillars of the African Economic Community in terms
of the AEC Treaty. IGAD signed the Protocol on Relations between the AEC and Regional
Economic Communities on 25 February 1998. IGAD has collaborated with COMESA and
the East African Community to divide projects among themselves so that there is no
duplication and to avoid approaching the same donors with the same projects. The member
states of IGAD are Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda.
a. Objectives
Dear students, IGAD aims to expand the areas of regional co-operation, increase the
members' dependency on one another and promote policies of peace and stability in the
region in order to attain food security, sustainable environmental management and

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sustainable development. The IGAD strategy is to attain sustainable economic development
for its member countries. Regional economic co-operation and integration are given special
impetus and high priority to promote long-term collective self-sustaining and integrated
socio-economic development.

The following points are IGAD’s aims and objectives:

 Promote joint development strategies and gradually harmonize macro-economic policies

and programmes in the social, technological and scientific fields;
 Harmonize policies with regard to trade, customs, transport, communications, agriculture
and natural resources, and promote free movement of goods, services, and people within
the sub-region;
 Create an enabling environment for foreign, cross-border and domestic trade and
investment;
 Initiate and promote programmes and projects to achieve regional food security and
sustainable development of natural resources and environmental protection, and
encourage and assist efforts of member states to collectively combat drought and other
natural and man-made disasters and their consequences;
 Develop a coordinated and complementary infrastructure in the areas of transport,
telecommunications and energy in the sub-region;
 Promote peace and stability in the sub-region and create mechanisms within the sub
region for the prevention, management and resolution of interstate and intrastate conflicts
through dialogue;
 Mobilize resources for the implementation of emergency, short-term, medium-term and
long-term programmes within the framework of sub-regional co-operation;
 Facilitate, promote and strengthen co-operation in research development and application
in science and technology.
b. Structure
Obviously, IGAD has the following organs:
i. Assembly of Heads of State and Government;
ii. Council of Ministers; Committee of Ambassadors; and

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 iii. Secretariat.
The Assembly of Heads of State and Government, which meets at least once a year, is the
supreme organ of the Authority. A chairman is elected from the member states in rotation.
The Council of Ministers is composed of the Ministers of Foreign Affairs and one other focal
minister designated by each member state. The Council meets at least twice a year. The
Committee of Ambassadors, comprising the Ambassadors or Plenipotentiaries of IGAD
member states accredited to the country of IGAD's headquarters, advises and guides the
Executive Secretary on the promotion of his efforts in realizing the work plan approved by
the Council of Ministers and on the interpretation of policies and guidelines which may
require further elaboration. The Secretariat is the executive arm of the Authority and is
headed by an Executive Secretary appointed by the Assembly of Heads of State and
Government for a term of four years, renewable once. The Secretariat, in addition to the
Office of the Executive Secretary, has three divisions, namely Economic Co-operation,
Agriculture and Environment, and Political and Humanitarian Affairs. The Secretariat is
responsible for the implementation of projects in food security and environmental protection,
infrastructure development, transport and communications, conflict prevention, management
and resolution and humanitarian affairs.

4.5.2. IGAD Member States

4.5.2.1 Ethiopia

Ethiopia has active comprehensive framework agreements and specific implementation

protocols with the three IGAD member States, with which it shares common borders with
each other. The comprehensive agreements with Djibouti, Kenya and Sudan, typically cover,
cooperation intentions in economic, social, infrastructure, transport, telecommunications,
trade, tourism and security fields. A three-level joint body provides political direction,
oversight and local level implementation mechanisms.

The High Level Joint Commission meets at Heads of State, Ministerial and expert levels as
the political body that sets political direction and takes fundamental decisions regarding the
cooperation. The Joint Border Development Commission is charged with the responsibility of

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oversight and is composed of the Authorities of the Regional administrations and the sector
Ministries. It is responsible to the Joint High Level Commission. At district levels, Joint
Committees implement cooperation in such areas as security, natural disasters, trans-
boundary epidemics, animal diseases and pests. The protocols govern specific fields of
cooperation and areas of immediate mutual interest as instruments of implementation.
On the basis of these agreements important road, telecommunications and power
transmission projects of bilateral and regional importance are implemented, underway or
planned. A wide range of infrastructural cooperation with Sudan includes the upgrading, on
the Ethiopian side, of the existing Azezo-Metema/Gallabat-Gedarif road in addition to seven
ongoing and planned road projects linking the two countries.

Cross-border peace and security and trade almost exclusively dominate the cooperation in
this regard. The cross-border security issues, by enlarge, are related to ethnic resource
conflicts, low key insurgencies and crimes related to cattle rustling across the respective
borders. Joint border commissions composed of regional administration, police, customs and
military authorities constitute the core members with oversight responsibilities. They
generally meet quarterly or biannually to review implementation and decide on issues arising.
District level local joint committees of corresponding composition be operational the
agreements and protocols.

Metema and Moyale

With regard to cross-border trade, a bilateral agreement on a cross-border scheme is
operational on the border with Sudan. Although unilateral similar schemes are operational on
the borders with Kenya and Djibouti, bilateral agreements are yet to be signed. Communities
on both sides freely trade in reasonable quantities for household consumption that does not
exceed personal carrying capacity. Currencies of both countries are used for exchange. On
the other hand informal cooperation in sharing available social services (schools and health
facilities) on both sides of the borders by the communities is evident.
Free movement of people in the border area, the flow of illegal migrants and seasonal
laborers as well as the growing entertainment establishments interacts in providing fertile
ground for the transmission of the disease. The current prevalence on the Ethiopian side of

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the border district is estimated at 20%-the highest in the regional State. Furthermore, the
absence of a joint programme has impaired the effectiveness of the national prevention
programme being implemented on the Ethiopian side of the border district.
Moyale-Ethiopia and Moyale-Kenya are border towns between Ethiopia and Kenya,
separated by a small stream. Moyale Ethiopia has a population of about 50,000, Christianity
and Islam being dominant. The key activity on both sides is trade; on the Ethiopian side about
75% are engaged in trade. People on either side cross to the other with ease on daily basis for
business, recreation, education, medical treatment, etc.

There is no any formal agreement regarding cross border trade or other cooperation between
the two countries. Cross border trade of goods, most of it informal, is significant, most of the
flow, in case of manufactured goods, being from Kenya to Ethiopia. The attempt on the
Ethiopian side to formalize such trade activity has not succeeded: according to the head of the
customs office in Moyale, almost all those who took licenses have returned it claiming that
they cannot make any margin after paying the license fee and taxes.

Cross border trade in services is also high; in this case mostly Kenyans coming to Ethiopia
attracted by the relatively better availability of restaurants and bars and other recreation
facilities. Besides, both currencies work in parallel on both sides of the border. Furthermore,
given the long common border between the two countries and what the inhabitants have in
common (common ethnic background, language and same traditional system), informal
exchange and interaction could be expected to be regular in rural areas as well. Interestingly,
there is also a high degree of sharing of facilities/resources on both sides of the border by
both communities.
The following examples may illustrate the situation:
a. Education service
According to information by local officials and members of the community, it is quite
common for students from either side of the border to attend school on the other side. There
are two factors: differences in education policy and English proficiency. On the Kenyan side,
(a) students have to pay school fees from grade 9 onwards; and (b) the quality of teaching and
the fact that English is spoken by the community offer better environment to learn English. In

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Ethiopia, on the other hand, education is free (up to grade 12) but the environment is poorer
in terms of learning the English language. These motivated (i) Ethiopian parents tend to send
their children to schools on the Kenyan side up to grade 8 and Kenyans send their children to
Ethiopian schools from grade 9 onwards where it is free. This way, students/parents are
trying to get the best of what each side has on offer. However, this tend overcrowd
elementary schools on the Kenyan side and high school on the Ethiopian side. This calls
either for the countries to pool resources to expand the capacity and/or to harmonization their
policy regarding school fees.
b. Health service
On the Kenyan side, the nearest hospital is found at about 80 Km. As opposed to more than
400 Km. on the Ethiopian side. This together with its good standard and service quality as
well as easy accessibility for Ethiopians has provided them with access to service within
reasonable distance. In fact, we were informed that it is probably used more by Ethiopians
than Kenyans, leading to fuller utilization of the hospital than would have been otherwise.
c. Water supply
Apparently, residents of Moyale Kenya depend on water supply from the Ethiopian side. Yet,
the only water supply available is one which was planned to serve a population of only
13,000 whereas Moyale Ethiopia alone currently has about 50,000 residents. This water
supply is also being shared by residents of Moyale Kenya as well. This has two
consequences: (i) a severe water shortage on both sides; and (ii) emergence of water vending
as a small business opportunity.
d. Fuel supply
At the border, fuel from Kenya is more expensive than that from Ethiopia. This is partly due
to policy difference (fuel price in Ethiopia is fixed by the government and subsidized) and
partly because of higher transport cost on the Kenyan side. The poor condition of the
Nairobi-Moyale road, compared to Addis–Moyale, meant that transport cost is less in the
former despite the longer distance (Addis-Moyale is about 770 Kms. compared to about 660
Kms. for Nairobi Moyale). The consequence is that up to several hundred Kms. into Kenya
people depend mainly on fuel from Ethiopia, creating opportunity for cross border fuel trade.
This has allowed Kenyans to consume Ethiopian fuel imported with hard currency, paying

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for it in their own currency. Besides, this trade is primarily illicit, implying a revenue loss.
This may also suggest, among other things, a need for policy harmonization.
From the above we see that there exists a diverse and dense relationship. It also suggests a
number of opportunities for cross border cooperation in between local communities and
authorities of the two countries. For example; given the degree of sharing of utilities and
services by the border communities on both sides, the school, health and water supply
facilities qualify for cooperation in expanding and upgrading them through joint financing, as
well as management and monitoring. Given that engagement in micro and small business
activities is a key livelihood provider on both sides of the border, organizing joint skills
training for those involved in similar engagement, provision of business development
services and networking them deserves due consideration.
4.5.2.2 Uganda-Kenya
Both countries have almost similar language and cultural. In this regard there is no barrier.
People in the two countries have a lot in common dating back to the British colonial period. It
includes common language (both English and Swahili), religion, blood relation as well as
relatively high degree of assimilation through marriage. People in the border areas (within 10
Km radius) do not require any travel document to go to the other side.
Infrastructure (transport in particular) link, both passenger and freight, is also relatively good.
Public transport, departing from either side, travel all the way through to the other side, rather
than terminating at the respective borders. The same with freight transport. In fact, customs
of both countries have established a common check point to avoid checking passengers and
goods on each side. So, for border areas on the main route, transport infrastructure barrier is
relatively low. However, this may be high for many border areas along the 5000km long
common border of the two countries.
Uganda maintains high level Joint Permanent Ministerial Commissions with all its neighbors
(Tanzania, Sudan, Rwanda, DRC, Burundi) in broad ranging cooperation areas spanning,
political, diplomatic, social, security, trade, infrastructure fields, among others, which serve
as framework agreements. At district levels, local cross-border entities that meet quarterly
manage cross-border issues. The main focus of the border cooperation is in security and trade
as between Ethiopia and its neighbors.

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Both Uganda and Kenya are members of the East African Community (EAC) which became
a customs union since 2005, gradually eliminating tariff barriers (planned to reach zero by
2010). The Uganda-Kenya relation is driven by the integration Agenda of the East African
Community (EAC). The EAC is working towards establishing a Common Market in 2010
thereby allowing free movement of goods and services, people, and capital as well as right of
establishment between the countries, creating a single market. The implication is that a year
and half or so from now, the borders between the two countries will cease to be external to
each other (i.e. become internal).
The EAC has no explicit cross border cooperation program including cross border trade
agreements, although informal cross border trade is estimated to be quite significant. Major
progress is made in the areas of the elimination of internal tariffs, establishment of common
customs management that supersedes national acts and negotiations on the establishment of a
common market is due to start soon. The forum also provides for the common management
of shared resources and protection of the environment on the common borders of Lake
Victoria. A Joint Border Commission on security with Kenya (small arms control, rustling,
terrorism, cross border crimes) is in place. It is reported to be working well both at the
Ministerial level and local levels where corresponding border structures are set up.
There is no particular bilateral cross border agreement between Uganda and Kenya. Most of
the trade is regulated by the EAC harmonization rules and formal channels. There exists an
informal cross-border trade mainly in goods serving the daily needs for the communities on
either side of the common border. Officials state that informal cross border trade worth up to
US$ 500-1000 is permitted. However, there is no formal agreement regarding this or other
aspects of cross border trade. Neither side carries out systematic check or controls the
informal flow of goods except in cases of some products that are on negative list such as
cigarettes, immature fish, charcoal, and antiques.
However, a recent study showed total informal trade to be quiet significant estimated at about
a quarter of the formal trade. At the same time, its significance in terms of food security in
availing food from surplus to deficit areas and its positive impact on incomes of the
population involved in trading and transportation is pointed out. The cross border trade is left
unregulated to some extent due to the expectation of tendency towards formal trade induced
by the progressive elimination of internal tariffs.
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Another area of cooperation between the two countries is in social services. Kenyan students
commonly attend Ugandan schools partly attracted by the higher standard of education. On
the other hand, for some border areas of Uganda, the closest school may be on the Kenyan
side, in which case Ugandan students attend such schools. The same holds true with medical
facilities. So, sharing of education and health facilities on both sides of the border is common
among border communities, despite the fact that there is no formal agreement to cooperate in
this respect.
4.5.2.3 Uganda-Sudan
The Joint Ministerial Commission established by the agreement signed in 2004 governs the
comprehensive cooperation between Uganda and Sudan in political, trade, tourism,
Agriculture, Transportation, investment and inter-institutional relations. The implementation
of the agreement is largely in diplomatic, trade and security matters. A further agreement is
also signed in 2007, with the Government of South Sudan that is yet to be operational.
Security, infrastructure and trade are the immediate priority areas of cooperation. Transport
connection between the two countries is very weak. The area has been unstable for long time
due to the freedom struggle in Southern Sudan and conflicts in Northern Uganda. Security, in
the border areas in particular, is still poor and is considered, by the Uganda Association of
businesses, as the most significant barrier to the flow of cross-border trade.

Sudan is currently the least significant trading partner among the neighboring countries.
Although trade is increasing annually, so far it is one way trade with little imports to Uganda
from Sudan. Cross-border trade with Southern Sudan in particular is on a growing trend.
However, security concerns and poor road infrastructure are the main obstacles. Cooperation
in improving the transport link between the two countries through joint investment in road
and rail transport development is one key area of priority.

They have already initiated and submitted to donors a joint financing proposal for the
construction of a railway link. One could reasonably think of similar initiative between
Ethiopia and Southern Sudan extending the Djibouti-Addis railway to Juba. This:-
a) Provides both Uganda and Southern Sudan alternative outlet to the sea, and

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b) Opens a completely new area of economic relationship by linking the economies of
Uganda and Southern Sudan with that of Ethiopia and Djibouti these economies have so
far been largely isolated partly by the absence of transport link and partly due to a
prolonged conflict. Of course, this will be a regional (as opposed to bilateral/joint)
project involving four countries, viz. Djibouti, Ethiopia, southern Sudan and Uganda.
Movement of people between Uganda and Southern Sudan is constrained by unharmonized
rules and a slow and expensive visa process. The Government of Southern Sudan issues
temporary border travel documents to facilitate mobility to cross-border travelers. However,
it is reported that the document is not recognized by the Government of Northern Sudan and
holders of the document are considered in violation of immigration law. On the other hand
acquiring Sudanese visa is described as prohibitive due to the high fees charged and the long
time it takes to grant visa to an applicant. Harmonization of the laws and simplification of the
visa process is seen as critical issue, by the officials of the Ministry of trade and the
Association of businesses, in order to remove the present constraints and encourage better
cross-border trade with South Sudan.
4.5.2.4 Djibouti
The Ethio-Djibouti Railway is the oldest infrastructural link between the two countries
providing services for well over a hundred years. Currently, the bilateral cooperation between
them has greatly expanded to include roads, telecommunications and power transmission.
The Djibouti port is Ethiopia's main import and export corridor. A privileged investment
arrangement also exists between the two countries.

Formal and informal trade between the two countries (on the border visited) is significant.
The border towns, Ali-Sabieh on the Djibouti side and Dewele on the Ethiopian side are
separated by a distance of about 9 km. The trade is regulated at the border posts-Gelilee 1 and
2 on the Djibouti and Ethiopian sides. A short visit and discussion was carried out on the
Djibouti side with customs officials and small border traders. The major findings are the
following.

A cross-border scheme of licensed cross-border traders similar as that exists at Metema

appears to be operational. However, the traders are only engaged in one way trade. They

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 complained of restrictions on the quantities of goods allowed (mainly food products) for
personal use is reduced by the Ethiopian side. As a result, they pointed out that the
number of licensed traders has decreased from the initial 153 to 3. Almost all such traders
are women.
Local officials on both sides cooperate through a joint local committee on matters of
crimes control and illegal migration. However, despite a number of problems affecting
cross-border trade management, local trade and customs joint committees are not yet
established.
Cross-border movement of people living in the border area is facilitated without need for
identity papers for daily interactions. Currencies of both countries are accepted in the
immediate border areas for local transactions.
With respect to sharing of facilities, at present, a health facility at Ali-Sabieh is the only
service shared by both sides.
The Djibouti customs officials believe a joint border post and a joint dry port facility
managed through common procedures would address the current problems including
standards and health inspections associated with the cross-border trade. They are also in
favor of a joint local trade and customs committee to address problems and better
implement the cross-border scheme.
By demonstrating the mutual benefits of cooperation, it creates incentive for further
cooperation. The need to continue enjoyment of the demonstrated benefits (if significant)
may ensure sustainability of the cooperation. It is useful to think of economic cooperation
and integration as means to achieve durable peace and joint development, both of which
interact with each other. At least three ways through which cooperation can affect the risk of
conflict could be identified:
1) Through increased interdependence;
2) Development of trust; and
3) Increased economic growth and reduced poverty. The IGAD countries typically share
long common borders with several other member countries. As such they also have
same communities and/or shared resources such as trans-boundary Rivers, forests,

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 wild life, river basins, etc. These may serve as important sources of linkage for
economic integration and represent a potential for mutually gainful cooperation
Differences in political ideologies, priorities and policies usually render borders to become
barriers between adjacent areas. Cross border cooperation thus requires special policy in
favor of border areas designed to eliminate problems that hinder integration It is necessary
and useful to prepare an illustrative list of potentially feasible areas of (bilateral and multi-
country) cross border economic and social cooperation.

Summary

Over the past two and half decades, West African States have been enmeshed in the struggle
to attain sustainable economic development and self-reliance through regional economic
integration. ECOWAS was established in May 28, 1975, by the sixteen member states of
West Africa [now remaining fifteen as Mauritania withdrew], as a practical approach in
tackling the economic dilemma of the sub-region that is devastatingly entangled in
excruciating poverty, underdevelopment and foreign dependency.

In addition, ECOWAS had strongly recognized the development and expansion of the
regional market as the corner piece of its comprehensive development strategy. As clearly
demonstrated in the preamble of chapter 2 Article 3 of its Revised Treaty, ECOWAS sought
to achieve economic integration through liberalization of trade between its member states,
removal of all impediments to free mobility of factors of production, as well as
harmonization of national economic and fiscal policies of member states.
Regional integration is believed to be important to many economists and states. Primarily, it
can be categorized as international, regional and sub-regional organizations. Even though
there are so many regional and sub-regional organizations, the following are the basic one:
European Union • Arab League, etc
Sub-regional organizations:
 ECOWAS
 COMESA
 SADC

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  NAFTA.etc
During the struggle for political independence in many African countries continental unity
and regional cooperation was acknowledged as a strategy for combating foreign dependence
and underdevelopment. In post-colonial Africa, motives for regional cooperation include
broad economic, social and political interests, and the need for greater international
bargaining power. Today it is very rare to find one Africa country that has not shown overt
interest in at least one of the several existing regional cooperation schemes on the continent.
It is significant to note that Africa alone, within the past four decades, has experimented with
about 200 inter-governmental organizations; most of them claim to have responsibility for
promoting regional cooperation. The practical results, however, have been very
disappointing. But African governments have continued to promote the ideals of regional
cooperation which they justified on the claim that regional cooperation is a strategy for self-
reliance and development.

Ethiopia has agreements with the three IGAD member States, considered in this unit, it
shares common borders with. On the basis of these agreements important road,
telecommunications and power transmission projects of bilateral and regional importance are
implemented, underway or planned. CBC features an important area in the bilateral relations
with the three neighboring countries. Cross-border peace and security and trade almost
exclusively dominate the cooperation in this regard. With respect to join CBC in areas other
than security and trade, little exists that goes beyond ad hoc cooperation.

Moyale-Ethiopia and Moyale-Kenya are border towns between Ethiopia and Kenya. There is
no formal agreement regarding cross border trade or other cooperation between the two
countries. Yet, there is high degree of socio-economic interaction between the border
communities. There is also a high degree of sharing of facilities/resources on both sides of
the border by both communities.

Uganda maintains high level Joint Permanent Ministerial Commissions with all its
neighbours. The main focus of the border cooperation is in security and trade. The Uganda-
Kenya relation is driven by the integration Agenda of the East African Community (EAC).
The EAC has no explicit cross border cooperation program including cross border trade
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agreements. A Joint Border Commission on security with Kenya (small arms control,
rustling, terrorism, cross border crimes) is in place. There is no particular bilateral cross
border agreement between Uganda and Kenya. Most of the trade is regulated by the EAC
harmonization rules and formal channels. There exists an informal cross-border trade mainly
in goods serving the daily needs for the communities on either side of the common border.
Sharing of education and health facilities on both sides of the border is common among
border communities.
The implementation of the comprehensive agreement between Uganda and Sudan is largely
in diplomatic, trade and security matters. Transport connection between the two countries is
very weak. Security, in the border areas in particular, is still poor and a barrier to the flow of
cross border trade. Security concerns and poor road infrastructure are the main obstacles to
cross border trade with Southern Sudan. Movement of people between Uganda and Southern
Sudan is constrained by not harmonized rules and a slow and expensive visa process.

Currently, the bilateral cooperation between Ethiopia and Djibouti has greatly expanded to
include roads, telecommunications and power transmission. The border towns, Ali-Sabieh on
the Djibouti side and Dewele on the Ethiopian side are separated by a distance of about 9 km.
The trade is regulated at the border posts-Gelilee 1 and 2 -on the Djibouti and Ethiopian
sides. A cross-border scheme of licensed cross-border traders similar as that exists at Metema
appears to be operational. Local officials on both sides cooperate through a joint local
committee on matters of crimes control and illegal migration. The opportunities for wider
cooperation, in particular, establishing joint facilities in the areas of education, health and
water supply are apparent.

COMESA originated as a preferential trade area (PTA) in 1982 and has 20 members at
present. Thirteen of the twenty member states participate in a free trade area (FTA); others
trade on preferential terms. The FTA was formed in October 2000 as the result of a long
period of tariff reductions and has followed some of the principles of open regionalism.
COMESA has 20 members including Angola, Burundi, Comoros, the Democratic Republic
of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi,

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Mauritius, Seychelles, Sudan, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe. Eleven
of the 20 COMESA members participate in a free trade area.
An important component that has been missing is a commitment to MFN liberalization at the
COMESA level, even though some individual member countries have liberalized unilaterally.
Adopting simple and clear rules of origin is an important aspect of regional arrangements.
Concerning Rules of Origin in COMESA, goods qualify for preferential treatment if they
undergo substantial transformation such that they contain a minimum of 35 percent regional
value-added, or include non-COMESA imported materials worth no more than 60 percent of
the value of total inputs used, or undergo a single change of tariff heading. There is a list of
―goods of economic importance‖ to member states, according to which the domestic value
added requirement is relaxed to 25 percent.

Self-Test Questions

I. Write ‘True’ if the statement is correct and ‘False’ if it is not correct.

1. OAU was established in 1993 in Khartoum.

2. The foundation for the establishment of AU was OAU.
3. Sub-regional and Regional integration as well as cooperation does not have any
significance and rational for African states and for the rest of the world.
4. Regional integration is highly influenced by economic issue than Political issues since
economy is the central issues of regional integration
5. Regional integration is equally respected by all states in African
6. One of the challenges of regional integration in Africa is how to promote inter-and-intra
regional trade in the continent.
7. IGADD is a regional organization it was formed in 1996
8. IGAD aims to expand the areas of regional co-operation, increase the members'
dependency on one another and promote policies of peace and stability in the region in
order to attain food security, sustainable environmental management and sustainable
development.

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9. The bilateral comprehensive agreements with Djibouti, Kenya and Sudan, typically cover,
cooperation intentions in economic, social, infrastructure, transport, telecommunications,
trade, tourism and security fields.
10. The rationale for border cooperation can be seen from its contributions to promoting:
integration, peace, security and stability and social and economic development
11. A formal dispute settlement mechanism in the form of a COMESA Court of Justice is
provided, but disputes in general have been successfully handled through an informal
process of diplomatic consultation and the court is not yet operational
12. The Intergovernmental Authority on Drought and Development (IGADD) was formed in
1996
II. For each of the following question, choose the best answer among the
given alternatives
13. Which one of the following is included under the critique on OAU?
A. Failure to respond to serious conflicts between member states
B. Did not prevent totalitarianism
C. All
D. None
14. Among the following alternative one is not the objectives of AU.
A. Tackle the key economic and social problems
B. Improve the relative weaknesses of OAU
C. Achieve great unity and solidarity
D. Defend the sovereignty of its member states
E. Promote sustainable development
F. Promote undemocratic principle within the continent
15. One of the following is not principle of AU
A. Sovereign equality among member states
B. Respect of border
C. Peaceful resolution of conflicts among member states
D. Interference within the internal affairs of the member states.
16. Which one of the following is true about the objectives of IGAD?
A. Promote joint development strategies and gradually harmonious macro-economic
policies and programmes in the social, technological and scientific fields;
B. Harmonious policies with regard to trade, customs, transport, communications,
agriculture and natural resources, and promote free movement of goods, services, and
people within the sub-region;

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 C. Create an enabling environment for foreign, cross-border and domestic trade and
investment;
D. Initiate and promote programmes and projects to achieve regional food security and
sustainable development of natural resources and environmental protection, and
encourage and assist efforts of member states to collectively combat drought and
other natural and man-made disasters and their consequences;
E. All
17. One is not the priority of IGAD Council of Ministers.
A. Conflict Prevention, Management and Resolution and Humanitarian Affairs;
B. Infrastructure Development (Transport and Communications);
C. Food Security and Environment Protection.
D. The legal document that declared Ethiopia as Federal Democratic Republic for the
first time
E. None
18. Basic structures of Au
A. The Assembly
B. The Executive Council
C. Pan-African parliament
D. All
19. The major areas of the declaration pertaining to CBC are the following.
A. The development of local CBC initiatives to be within the framework of RECs.
B. Local stakeholders to be the direct initiators of CBC under the auspices of states.
C. The states to mandate RECs to implement CBC.
D. The RECs to provide the legal framework for CBC
E. All
20. The treaty of COMESA was signed in Kampala:
A. 1980 B.1983 C. 1990 D. 1993
21. Which one of the following is not the challenge of African regional integration?
A. Poor trading system B. Political convergence C. Lack of economic convergence D None
22. Which one of the following is an area of African cooperation?
A. Political co-operation B. Security matters C. Transport and Communication D. All
23. Which one of the following is not included under East African integration effort?
A. ECOWAS B. COMESA C. East African Community (EAC) D. None
III. Discussion points.
24. Which one of the following is included under the objectives of SADC?
25. Who was the first chairperson of OAU?
26. List and discus abut major institutions of COMESA.
27. Comparatively write the Priority objectives of IGAD and COMESA.

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28. Write the contributions of IGAD to create an economic integration in between its member
states.
29. What are the similarities between the structures of EU and AU?
30. Most of the currently active regional organizations in Africa were formed or re-
established in two waves:
a. ______________________________________________________
b. ______________________________________________________

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Wolkite University: Department of Civics and Ethical Studies